Seller Tips: What are comparable properties and how are they determined?
While no two Warner Robins homes are exactly alike, the only way a real estate agent can accurately determine the right asking price for your home is to compare it to other homes that are similar. These homes, which are referred to as “comparables,” are typically located near to your home, share many of the same features of your home and have either been recently sold or are currently for sale. By analyzing the figures associated with these homes, your agent can better determine a reasonable asking price for your property. To help you better understand how this figure was determined, your agent will provide you with a comparable market analysis, or CMA.
Generated by a computer program from the real estate agent’s MLS, the CMA is a professional report that is created after your agent inputs certain information about your home. This information is then sorted according to a number of different criteria, including all of the following:
- Zip code or neighborhood
- Age of the home
- Total square footage of the home
- Number of bedrooms
- Number of baths
“Other information, such as a price range and sold dates within the past 3 to 6 months will also be explored when generating a CMA,” says Colorado Realtor Brian Kinkade. After inputting this information, the agent receives information about those homes that are the most similar to yours that have sold in recent months. Unfortunately, this information is not so easily accessible to the typical homeowner, as it is provided through the members-only MLS system. In order to access this information and other data, such as tax information, the real estate agent must pay a membership fee. The fee is well worth it, however, as it allows the agent to obtain unbiased empirical evidence regarding those market conditions that are related to your home.
Obviously, there are some limitations to a CMA report. After all, it is possible for two homes in the same neighborhood to sell at a very different price per square foot. The data provided by the MLA does little-to-nothing to help explain these discrepancies. Furthermore, there are certain home features that are not easily quantified by a CMA. Still, a committed real estate agent can look through the listings included in the report in order to search for clues as to why a home sold above or below the market average.
The condition of the home, its drive-up appeal and the level of motivation of the seller and/or buyer, for example, all have an impact on the selling price. For these reasons and more, the homes with the highest and lowest selling prices may be disregarded when determining a list price. Ultimately, you should remember that comparable homes are often your competition and buyers will purchase those homes they consider to offer the best value. Therefore, you should be sure to set your price carefully to ensure the best results possible.