Pricing your home for sale can determine how much interest it will generate when it first hits the multiple listing service(MLS) and how quickly it sells. A comparative market analysis (CMA) is the tool most often used by our team of Mississauga real estate agents to show home sellers how much their property will likely sell for, given the inventory and conditions of similar properties.
Dissecting a CMA
The comparative market analysis is not an appraisal. The CMA is prepared by our team and our real estate agents using information gleaned from the MLS, market reports and their knowledge of the local market. An appraisal is prepared by a certified property appraiser using established guidelines based on comparable values or replacement values.
Important features to consider include square footage, number of bedrooms and bathrooms, amenities, finishes, the age of the home and, most certainly, its location. Homes that may be shortlisted as comparables should have been recently sold.
The subject property and comparables should be as similar as possible. Thus, only condominiums can be used in a CMA for a condo property and single-family homes are included in a CMA for a single family home. Likewise, the location of comparables should be as close to the subject property as possible. Home features are compared side by side with the subject property and valuations are raised or lowered, depending on the comparison.
CMA as a Seller’s Tool
It is easy to see how the CMA is useful in determining a price that will attract potential buyers, without undercutting the home’s true market value. The report will show that the home’s selling price is reasonable and well within the range of similar homes for sale, sold recently or withdrawn from the market.
Without a CMA, sellers run the risk of overpricing or underpricing their property, negatively affecting the home’s salability and potential profit. When the property languishes on the market, sellers accrue more maintenance costs. In addition, keeping the house in open house-ready condition can be very stressful for homeowners. When the home is on the market for much longer than the market average, it is more likely to attract lowball offers.
The CMA becomes even more important when undervalued properties, such as foreclosures and short sales, are on the market. As a Mississauga real estate agent with more than 25 years of experience, I understand the value of CMAs. Call me today at 905-502-1500 or visit my website, www.mcdadi.com, for more information.