Determining the Value of Your Home, Comparative Market Analysis

Establishing the right price for a property is the first & most important service Realtors provide for their client sellers. This is a brief overview on how a competent Realtor arrives at an accurate price when preparing to list a property for sale.

Realtors create a Comparative Market Analysis, or CMA, calculated to determine the fair market value of a property. A complete CMA should include a minimum of six comparable properties, or comps; three sold comps, and three comps currently listed and competing with the subject property. Whenever possible, it’s important that sold comps be no older than six months, in order to reflect changing market conditions.

Many factors are considered when choosing the ideal comparable properties. Ideally, comps should have similar location, amenities, age, style, square footage, present and future use potential, and be in similar condition. In beach towns, proximity to the beach or bay and associated views and/or view potential is an imperative factor when identifying relevant comps.

When there are no ideal similar properties, the search is expanded in all of the above categories; appropriate value adjustments are made, and a range of value is reached.

A presentation is then made to the seller, and the process of listing and marketing the property begins!