Sellers and the Comparative Market Analysis

I offer all of my clients a free market evalulation

I offer all of my clients a free market evalulation

Sellers and the comparative market analysis. What is it and how does it pertain to you? These questions will be addressed in my article. I hope that once you’ve read my article you will be able to see the importance of this report.

Ok, so you’ve decided that its time to put your home up for sale on the professional market. You’ve interviewed several agents and finally signed a seller representation agreement with a preferred agent. So what comes next?

Hopefully at this point, you and your agent have come up with a competitive figure as to what you will be listing your home for, or at least a price range of some sort.  So where did this figure come from? How will you know what the present value of your home is worth?

This is where we turn to the discussion of the Comparative Market Analysis. Also known as the CMA, the CMA is a comprehensive guide that real estate agents rely on to provide advice to their clients. CMA’s are generated by a computer program from your agent’s local real estate board affiliation. For example, I belong to the Toronto Real Estate Board.  I have access to CMA’s through my privileges with the Toronto Real Estate Board.  It is through this access that I am able to search public and proprietary data, including tax information, sold transactions and listings that have been inputted by all other members of TREB.

How is this report generated? Your agent inputs search parameters into the CMA program for homes for sale or those that have recently sold that are most similar to your home. This information is sorted according to the fields of information such as neighbourhood, postal code, number of bedrooms, number of washrooms, age of the home, square footage etc.

The CMA program then creates a report that tells your agent which homes most similar to yours have sold recently and which homes are for sale.

In my opinion, the CMA provides unbiased information on the latest market conditions as it relates to your home. Furthermore, the CMA will give you an indication of whether or not prices are going up or down and what buyers are currently willing to pay.

Sounds pretty simple right? Well there’s more. As you’ve lived in your home for many years, you’ve also spent countless dollars on upgrades and renovations.  Only you know about these upgrades and renovations. So now you have to be realistic. How do I you incorporate this into your CMA?

While a home with granite countertops and expensive hardwood flooring is certainly more than a home that doesn’t have any of the above, you will probably not get 100% of your investment back in your sale price. At this point, your real estate agent would make some adjustments in the price of your home and then suggest a price range for you. Ultimately, the asking price would be up to you.

In closing, the comparables that are used in the CMA are your homes competition. The homes that your agent uses to compare to your home are the same homes that buyers will utilize for comparison when they shop for a home.

**Stayed tuned for my upcoming article, as I will be discussing how CMA’s will benefit buyers looking to purchase a home. **