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Deciding to put your home up for sale does not necessarily mean commanding a price based on your own personal assessment. You will either lose in profit by setting the price too low or lose the opportunity to sell your property at a reasonable price by setting the price too high. But you're still unsure about contacting a real estate broker since you have no basis for determining whether the agent is quoting you a realistic value or simply making a killing for him or herself with the prices s/he quotes. All this has a solution of course—real estate prices can be assessed by a report called a Comparative Market Analysis or CMA. A lot of real estate websites on the Internet offer free CMA reports so you can determine a fair value for your property.
The Comparative Market Analysis report will contain the following information, which is used to determine the value of your property:
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Active listings of residential homes up for sale in the real estate market: These listings will serve as price indicators of the prevailing market value. The selling price is still based on the decision of the seller, whether or not realistic, which could skew the market value numbers.
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Pending listings that show homes that were previously part of active listings, but are still awaiting final action on the sale: Basically, the listing agent will maintain secrecy about the imminent sale of the property and will not divulge any information until the actual sale takes place. Pending sales are good indicators of real estate prices and where the market is going.
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Sold Listings of residential homes sold during the past six months: These are the most important price indicators to be used in estimating the value of a property.
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List of residential homes taken off the market or withdrawn for diverse reasons. Reasons for cancellations from the listing may include the following: The sellers change their minds about selling their house. The current real estate price is too high and no buyer has made an offer. The real estate property is taking too long to sell. Sales agents, as a recourse, pull the property off the listing with the intention of putting it back on the active list at a later time. The seller of the residential property is dissatisfied with the sales agents and services are discontinued. Listings of real property posted for sale but never sold until it reached a certain period of expiration. Some properties are either unreasonably priced or are not attractive enough to the buyer. There are also instances in which an agent pulls a property out from the listing in order for it to reappear in the active listings at a new price.
Based on the CMA listings, you can now compare your property by comparing points of similarity between your property and those on the list. This may include square footage, the year the house was built, similarity of features, and similarity of location. A comparison of all these points will serve as an indicator for the price of the property you want to buy or sell. It will give you a baseline for judging offers, as well as the agent's recommended selling price.
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