Before a home is put up for sale or listed with a real estate agent, smart sellers get a comparative market analysis (CMA). Sellers use a CMA to determine how to price their own home.
Setting the right price at the beginning is the single most important thing you can do as a seller, and it requires looking closely at what other similar homes sold for to judge the relative value of your home. This is because the market sets the value a buyer is willing to pay for your home, not how much you have put into it or how much you feel you should get.
Reports vary in size from just two pages of comparable home sales in the area to more than 50 pages. A CMA is typically compiled by a real estate professional and gives information about homes similar to yours in location, size and amenities that are either on the market now, have sold recently or were listed but expired.
The complexity of the report depends on the agent's practice,
but a standard comparative market analysis contains the following data:
The homes that have closed within the last 6 months are your comparable sales, and these are the sales an appraiser will use to appraise your home for a buyer, along with pending sales. These sales will determine your market value.
These properties were taken off the market for any one of several reasons. In most cases, the homes were taken off the market because they were priced too high. Look at the median prices of this group and you will see it is almost always higher than comparable sales.
Listings can also cancel for other reasons, including seller's remorse, too many days on the market, requests for repairs or the seller fired the agent.
Expired listings have the highest median price because they did not sell and were most likely priced too high. Some expired listings will show up as active, typically listed by a new agent at a lower price. Sometimes listings expire because the home needed too many repairs or the home was not marketed well.
The comparable sales are those that most closely resemble your home, and this is where you should pay the most attention.
Start by looking at the homes on the list that are most similar to your home in terms of:
If you want to know what your house is truly worth, a CMA is the best way to do it.