Pricing your home
right for a top-dollar sale
When a real estate professional is asked to provide an opinion of value a property on behalf of a potential seller, he or she generally uses what’s referred to in the industry as a Comparative Market Analysis (CMA). The primary purpose of the CMA is to determine the “Fair Market Value” (FMV) of the subject property. That being, the highest price that a buyer is likely to be willing to pay for the property in today’s real estate market.
The REALTOR has a wealth of information at his/her disposal to assist in preparing the CMA. Through the local real estate board’s Multiple Listing Service, the agent will want to research and study three key factors in determining FMV.
The first factors your REALTOR will want to consider are the other similar properties that are currently being offered for sale in your area. These are other homes that potential buyers will also be viewing, and comparing with yours, as they shop for a home. By studying these homes, we can get a clear picture of what alternatives a serious buyer has to choose from. It only stands to reason that a prudent buyer will not pay more for a property than it would cost to purchase a comparable substitute. Therefore, to some extent, your home’s FMV is influenced by other homes, currently available for sale.
Secondly, your REALTOR will want to study details of properties that have recently sold in your area. Again, we’re looking for homes that could be considered similar to yours. By studying the selling prices of these comparable homes, your REALTOR begins to get a feel for what other buyers have actually been prepared to pay for homes like yours in the recent past. Of course, no two homes are exactly alike. It’s the REALTORS responsibility to research these homes to obtain details about their condition and the special features that existed at the time of sale. The agent can then directly compare the subject property (your home) to the recently sold property, determine exactly how they differ, and finally, make monetary adjustments to the selling price to compensate for the differences. The agent ends up with an adjusted selling price. This is assumed to be the price that a purchaser would have been prepared to pay for the comparable home, if it was just like yours. By repeating this process with three or four of the most comparable, recently sold homes in your area, the REALTOR is able to determine the probable range of value of your home in today’s market. This is the acid test that will eventually be used by a lending institution to determine how much money they are willing to lend the purchaser to buy your home.
Finally, the REALTOR will want to consider those homes that were recently offered for sale in your area, but failed to sell. While you naturally want top market value for your property, most people will agree that there is a point where the price would obviously be too high. By examining the expired listings an agent can get an understanding of where that point is, and help you avoid it.
When your TeamFisher seller’s specialist visits your home, he will bring the entire MLS to your kitchen table and review all of this recent sales and listing activity with you to help you make the best pricing decisions that will result in a sale within your desired time frame.