Making Sense of a CMA - Competitive Market Analysis

Here are some things I would recommend looking at when looking at active, expired, pending and sold listings on your CMA.

*What is the average List price in your neighborhood on active homes

*What is the average Sale price in your neighborhood on sold homes

*You’ll notice that Sale Price is more than likely only 3-4% lower than FINAL List Price on the Sold properties

*What is the average number of days on the market?

*What is the original list price of the fasted selling properties? You’ll probably notice the sold homes that were originally priced too high, eventually lowered their price, still sold for market value, but the time on the market was longer.

*Look at Expired listings and Do Not Follow their lead on price! These houses did not sell!

*What is the price per square foot on the Sold properties?  This helps when homes are not very similar in a neighborhood. The highest dollar per square foot price will be the houses with major updates like kitchens, baths and roofs. These homes also have the most amenities.

*How does yours compare in terms of size, upkeep and amenities? Obviously, the lowest square footage price will be the homes that are the least updated, but most homes will fall somewhere in the middle.

*The key here is to price it just below the bucket where it objectively fits. Information on the updated features is usually in the marketing remarks of the MLS listing provided by your agent.

*Pricing your home on an even number price point helps your home come up in more searches.  Let’s assume your Correct Market Value is 175,000.

        *If you price your home at 174,900 you would come up in a search from 150,000-175,000.           

         *However, you would not be in a list of homes from 175,000-200,000. Set your price on the even dollar,          in this case right at 175,000.

If a home is overpriced, buyers may not even see your home. Let’s use the scenario above and assume a buyer is looking for homes up to 175,000. If you’ve priced your home above the market at 185,000, that buyer would not even see your home because it will not come up in their search for homes up to 175,000.

If you would like a CMA on your home, you can request one here, or go to www.LaurieHomeSales.com

PRICING YOUR HOME TO SELL

The market price of a home is clearly what a buyer is willing to pay for it.

Now I’m not here to paint an ugly picture, I am here to give it to you straight. Setting the price right is the single biggest factor in getting the most for your house in the shortest amount of time.

I know what you are thinking. If I list it too low, I won’t have room to negotiate. Let me help! If your home is overpriced in this market, it will be impossible to sell until it is priced for the current market. Yes, I said Impossible! Buyers will not even come to look at your house. The buyers are the experts on the market. They know the competition well.

Neighborhood price comparisons are the only way to set the right listing price. If a home is reasonably priced and market-ready it still sells pretty quickly and usually within 3-5% of asking price.

The first step in pricing it right - Get a CMA from a Qualified Agent– A Competitive Market Analysis, keyword being “Competitive”! It is a summary of homes that are active, expired, pending and sold in your market.

Some facts about a CMA -

This is a report of ONLY your neighborhood.

Information is no older than 6 months.

Things to look at on your CMA

Active properties - These are your competition, go in a couple of them when they have their open houses. Look through their pictures online.

Þ Compare objectively, where your property is better, worse, bigger, smaller, more or less updated. So you have an idea of what the buyers will have to choose from. This information will go a long way in pricing your home to be COMPETETIVE.

Þ You do not want to be the most expensive home in the neighborhood

Most importantly, take a look at the SOLD homes. These are true to life numbers of what homes in your neighborhood will sell for.

My next post will be about How To interpret a CMA

For more seller tips go to www.LaurieHomeSales.com

Seller, What's a Buyer's Market when you're moving up?

BUYER’S MARKET DEFINED

Þ A Surplus inventory of homes on the market

Þ More Sellers than Buyers

Þ Low/No appreciation levels

Þ Motivated Sellers as your competition

Þ Sellers offering incentives

Þ More than 6 months of supply on hand, based on the number of homes sold per month (Many markets have 9-12 Months Supply)

Let’s think about this. If you are moving up, A Buyer’s Market or a Seller’s market, does it matter?

If you want to sell your home to buy another home, the Buyers market, or Seller’s market, for that matter is less relevant to the big picture than you might think.

Any dollars that you may give up on the sale of your home, you are very likely to make up when you buy. It washes out, so pricing it right in the first place is a win-win situation for you.

In this Buyer’s Market, who demands a bargain?

1. Buyers for your house

2. You, when you move

Just some food for thought!

If you are putting your home on the market, you want it to be appealing to potential buyers. Staging a small space can be a challenge. These tips will help.

The last thing you want to do is make a small room seem even smaller with the “wrong” furniture, arrangements and accessories.

A small space does not have to lack style! With the right accessories, furniture and colors your small space can leave buyers with a “big” impression.

1. Furniture – Make sure the furniture is the right scale for the room. An over-stuffed sofa in a small room will appear to shrink the space. Call attention to the architectural and design features of the room by making nice hardwood floors or the bay window your focal point. Using smaller furniture will help do that.

2. Natural Light - Using natural light is one major thing you can do. Play up all the windows. The natural light coming in will help open up your space. Using complementary curtains instead of blinds will help frame the light. Blinds can seem heavy.

3. Storage – a sleek media storage cabinet helps manage the clutter. Using an ottoman that double as storage is another way to keep the clutter to a minimum and space to a maximum.

4. Mirrors – Expand the room. Other transparent or reflective surfaces like glass can give the appearance that the room is less full. There are even mirrored object you can use around the room.

5. Other light features – Use nice modern fixtures, lamps and shades. Play up the design with modern or recessed lighting.

6. Color – Paint 3 walls a neutral color and one wall with a splash of color. This will help give the appearance of a bigger area.

These tips will help you get your small space designed for a big impression with potential buyers!

Wright Patterson Air Force Base Area - After I posted the Average Sale Price by Area, I realized that a year to year comparison might be in order to give you prospective on the market from year to year. (rounded to nearest thousand)