Selling a home is often more stressful than buying it in the first place. There may be emotional issues, or you may need to move for work. You may be upsizing, downsizing, or retiring to the mountains or the beach. Whatever the reasons, you want to get the best price for your home that you can, and this means avoiding one major mistake.
Pricing your home for sale isn’t an exact science, though there are accepted mathematical valuation processes that should get you close to the right price to sell at top dollar in a reasonable period. In a super hot market, any price may work, as you should have a bidding war anyway. However, not many sellers are lucky enough to live in one of those hypermarkets.
If you’re in a more normal market environment, you may hear that it’s either a buyers’ or sellers’ market, meaning one side holds an advantage. When inventory is low, and there is buying pressure, it’s a sellers’ market. When there are plenty of homes to buy, or there aren’t many buyers out there, you’re in a buyers’ market. Most fall somewhere in the middle, maybe leaning a little one way or the other. If you are thinking of selling, you need a CMA (Comparable Market Analysis) by an experienced agent. Here is what a CMA includes and how it works.
Don’t Be Lax about the CMA (Comparative Market Analysis)
The CMA is the math process used by your listing agent to come up with the price at which to list your home. It’s involved, but here are the basic steps:
- Comparable homes (comps) are gathered by your listing agent. These should be homes as much like yours as possible, and they should be very recent sales. Old sales may not reflect the current market, as it may have changed.
- The sold prices of those comps are adjusted to match your home’s characteristics and features better by adding to or subtracting from their actual sold prices to adjust for more or fewer bedrooms, baths, or other differences. In other words, if a comp has one more bedroom than your home, an amount estimated as the value of a bedroom would be subtracted from that comp’s price. It is expected that it would have sold for less with one fewer bedrooms. This process is done for each major feature difference.
- Once adjustments are made, the prices per square foot for each of the homes are averaged together, and the resulting price per square foot is multiplied by your home’s square footage to get a value number.
You want to ask questions about the CMA, look at it, and check out the comps used by your agent. It’s not that you don’t trust them, but you do want to get them to explain their process and the choices they made. If there were multiple comps available, why did they choose the ones they did? At best, the CMA process is an estimate with subjective variables, so you may even want to try some other comps if they’re available. At least have your agent explain why they chose those comps and how they valued the adjustments.
Take a close look at the features of the comps and compare them to your home. Does your home stand out in some ways or fall short in others? Be realistic, as you want as accurate a current market value as possible. Too low may get you a fast offer, even a full price offer, but you may leave money on the table. Too high and your home will sit on the market.
As the time on the market grows, buyer agents will tell their buyers to lower their offers. Spend some time analyzing your agent’s CMA and their choices in comps to avoid a costly listing mistake.
Are You Thinking of Buying a Home in Dubois County?
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View the newest homes listed in Dubois County in the last 10 days:
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Listing courtesy of Jud Collett from FC TUCKER EMGE REALTORS.