Our home is not just an investment; it is an extension of ourselves. Our home is where we may have raised our children and learned all about gardening or celebrated holidays. Sooner or later, while we will always treasure the memories, most of us outgrow our home. If this is the case for you, your realtor will break out several tools to help you valuate your home to get you the best price. One of those tools is a Comparative Market Analysis or CMA.
Dare to Compare
The Comparative Market Analysis is an in-depth report prepared by your realtor that gets to the core of your house and the spirit of the neighborhood your house is in. This report is compiled before your house goes on the market and uses “comparables,” which are other nearby properties that have similar features, style and size to yours that have sold in the last three to six months. These comparisons help determine where to position the list price in order to get the best selling price for your home.
The Big Three
When you sit down with your realtor, you may already have an idea of your home’s worth and most likely have already checked all the automated valuation models (AVM’s) such as Zillow, Realtor.com and other real estate platforms. However, your realtor’s knowledge base of the area and expertise at evaluating houses and location are not taken into consideration with AVM’s. Consequently, AVM valuations are often too high or too low. Your realtor will provide a more accurate and current picture of your home’s worth. Below are three key areas that are considered when preparing your CMA.
- Interior features are one of these key areas your realtor will look into. These can include, but are definitely not limited to, the square footage of your home, the number of bedrooms and bathrooms and basement type. Basements, you ask? Yes, basements. If you have a fully or partially finished basement, the finishing details will help define the value of your home. Does the basement have a window and natural light, or is it more for storage? In other words, how livable is the actual space. The type of ingress and egress the basement has is also important when preparing a CMA. Do you have a true walkout basement, or is it a walk-up basement or in-ground? Regardless of the type, style, and finishing details your basement has, it will add to the overall square footage of your home. However, it will most likely be valued at a lower rate than above ground living space because by and large basements are cheaper to construct than above ground structures.
- Exterior features that your realtor will consider include deck, patio and gazebo add-ons, side-load versus front-load garages, as well as hardscape and landscaping features. Do you have an outside masonry fireplace and patio or fountain or even a koi pond to help add value to your home? Siding, windows and roofing are taken into consideration but are typically not valued by a realtor for a CMA but are used to evaluate overall maintenance condition.
- Location is always the most important factor. Is your house located on a busy street, or are you on a pipestem lot? Does your house back to trees, a golf course, lake or pond? If so, then these site features may add value and be cited in the CMA report. Your realtor should know how to choose comparable homes with similar site features.
Trust me when I say there are a lot of other factors to be considered in valuing a property. Preparing a good Comparative Market Analysis takes time and requires an understanding of the marketplace and area trends. This professionally researched report from a knowledgeable local realtor will give you a well-rounded portrait of your home and neighborhood, including a confident listing strategy. Belinda Jacobson-Loehle of Jacobson Realty and Home Staging is ready to create you a great CMA. Contact me today.
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