WHAT IS A COMPARATIVE MARKET ANALYSIS?
Selling a home is a bit more complicated than putting up a sign, setting a price and crossing your fingers. Although it involves an element of suspense, and is not often a scientific certainty, it should not be a gamble either. There are proven ways to minimize the number of “Days on Market” and maximize the selling price.
Conversely, finding a “good deal” on a home to purchase can be frustrating, especially when the field of available properties is crowded. Making an offer should be based on more solid ground than emotion; knowing some history about local trends can be educational as well as financially beneficial.
Do the Research
One of your best tools is a Comparative Market Analysis (CMA). When you first consider the possibility of selling your home, you will undoubtedly have some sense of its value, and at least a ballpark expectation of the price you can ask.
But a comprehensive examination of recent transactions, known as the CMA, will give you a graphic and honest appraisal of local conditions. Month-to-month comparison and previous year statistics for sales, price adjustments, pending sales and withdrawn listings provide insight into trends. Market conditions in Las Vegas vary from one month to the next and can change dramatically over the course of a year.
Sales statistics also vary from one neighborhood to another, and a volatile market will be affected by outside factors. The CMA, in the hands of a real estate professional, offers an in depth look at local sales, highlights trends, and details factors that benefit sellers and buyers alike.
The CMA can be used as an effective bargaining tool by potential buyers and their real estate agents. Neighborhood values, number of homes currently on the market, turnover, average price, age and demographics are all facts that are useful in the decision-making process.
Analyze the Facts
Depending upon your needs, a market analysis may constitute a simple listing or include a detailed compilation of current listings and asking prices, recent price adjustments, pending contracts and completed sales. Number of days on the market (DOM); the average time between accepted contract and closing, and a comparison of selling price and listing price offer valuable information for both sellers and buyers.
Neighborhood comparisons also offer valuable insights, especially when the statistics reflect relative appreciation rates for older homes vs. new construction, number of cash sales, rental rates and foreclosure/pre-foreclosure rates.
Even though statistics provide factual analysis, some degree of interpretation is inevitable, and resulting conclusions may differ. It is important, therefore, to work with a real estate broker whose experience and judgment you can rely on to give you not only the best information available, but the valuable guidance you require to fulfill your needs.
Professional real estate advisers speak in terms of “ranges,” probabilities and averages. In any real estate transaction, the goal is to walk away with the best deal possible. The information contained in a comprehensive market analysis will help you do that.