CMA and Sellers
Comparative Market Analysis (CMA) is a great tool to use when you are getting ready to sell your house. Many realtors will offer a free CMA to help you understand what your home is worth. When the CMA really comes in handy, however, is before you list your home. This does not have any legal value, but it is a great tool for a home sale. Doing a CMA will help you know what price you should list your home at depending on the current market, location and past sales.
Included in an in depth CMA is usually, active listings, pending listings, sold listings and expired or withdrawn listings. Sold listings are more realistic than active, as sold shows how much people are actually willing to spend. Sometimes active and pending sales aren't realistic because people are going to list at whatever price they want to, not necessarily based on a CMA. Cancelled, expired or withdrawn listings can be helpful, because many times they have been taken off the market because the price was too high. Therefore, you might want to keep your home listed at a lower price. You should not use these listings, however, as your basis on market value because there are reasons other than the price that the house may have been taken off the market.
After finding different homes with different sales statuses, it is time to look at comparable homes. Comparable homes mean that these homes look the same, have similar square footage, have a similar age, are in the same condition, a similar number of beds/baths, have similar yards/land, have similar upgrades and are in the same location. It is always enticing to try to get the most money out of your home, but you want to make sure you are pricing based on comparable homes and the market, so that the home doesn't turn off potential buyers. If the house is priced right, it will be more desirable and will probably get a higher price from a bidding war. This has especially been the case in Colorado.
CMA and Buyers
For buyers, running a CMA can be very helpful as well. By running a CMA, you may be able to see if a house you are interested in buying has been priced too high, thus giving you validity to make a lower offer. You may also find a discrepancy on square footage. If a house that is comparable on square footage sold for much less, you might be able to argue a lower price based on square footage. The analysis will also give you insight into how much the seller bought the home for. If they are still profiting with your offer, they may be more willing to accept it. You can also save money by buying when the market isn't as crazy, because sellers will be more receptive of an offer. If you buy during the high season, you might end up spending more just to outbid another buyer.
I am a real estate professional, serving Boulder and Denver, Colorado. My extensive knowledge of the market, coupled with my commitment to provide extraordinary service, has resulted in hundreds of successful transactions. Let me help you buy or sell your home.