In order to determine an appropriate price for your home, your Realtor will complete a Comparative Market Analysis (CMA) to understand the property's condition, compare it to the market and set an accurate price. Setting the right price before you list is critical to getting the most for your home and selling it quickly.
Having a professional with experience in your neighborhood to prepare a CMA gives you the facts and insight to set the right price. Although a CMA is not a true real estate appraisal, your Realtor uses the same methodology as an appraiser to determine where your house fits into the current real estate climate.
Two rules to follow in real estate appraising are
- pick “like” homes – the same features, year built, similar styles, and size, and
- pick homes in the same general area that have recently sold within the past six months.
Of course homes are never identical and adjustments must be made by giving value to certain features or subtracting for what is lacking. The integrity of the data rests on how close the comparable sales are to your house.
In comparing “like” homes, your Realtor will recommend a list price that is attractive to a buyer, but more importantly, in line with recent comparable sales, which is the price that real buyers are currently paying for similar homes. Be careful not to base your value on the asking price of other homes currently for sale. These are only asking prices, which likely will not be what they end up selling for.
The goal is to find a list price that makes a buyer want to make an offer NOW. If the price is too high, even a beautiful, lovely home can become “old news” and we may also have to adjust the price during the process to actually get it sold. I recommend that we pick a list price very near what we think the sales price will be to avoid the “price reduced” stigma.
On average your home will be among 10-20 homes that buyers will compare and contrast. To be picked first, your house must be perceived to be the best value. YOU control how fast your house sells when you pick the listing price.