Listing your home yourself, or as for sale by owner (FSBO) can save you money. It helps you avoid commissions, letting you bank more of the money.
But, it also means you don’t have access to expert advice. You’ll have to determine the sale price on your own. And a competitive market analysis can help with that.
What’s a Competitive Market Analysis?
A competitive market analysis, or CMA, is a report. It compares your home to similar houses that have sold or listed recently in your area.
For example, if you have three bedrooms and two bathrooms, the report includes properties with those features, or close to them. Those aren’t the only attributes the CMA analyzes. Details like lot size, total square footage, fireplaces, and similar features may also appear on the report.
Details about the other properties, typically called “comps,” are in the CMA as well. Usually, you can see the zip code (if not the full address) as well as a list of the property’s attributes.
Why You Need a Competitive Market Analysis
When you list your home, you don’t just want to pluck a price out of the sky. If you list outside of the fair market value, you probably won’t see any offers.
The CMA gives you information about the going rate for houses like yours in the area. You’ll see the list price of active listings and the sale prices for ones that sold or are in escrow.
You can take the report information and get a reasonable idea about your home’s value in the current market. Then, by listing your home at a comparable price, you increase your odds of getting an offer.
If making a quick sale is your goal, then select a price on the lower end. If you have time, aim somewhere closer to the middle.
Understand that homes that qualify as “local” to yours is subjective. Slight variation in location can greatly impact price, even if a property is only a street or two over. So, just because the report includes a specific house doesn’t mean you shouldn’t dig deeper.
Where Can You Get a Competitive Market Analysis?
In the vast majority of cases, real estate agents will provide one for free. They may try to get you to sign with them, but that usually isn’t a requirement.
A lot of people looking to sell their house request reports from multiple agents, so feel free to do the same. Their personal perspective impacts the results, so obtaining more than one CMA can give you a better idea of your home’s value.
Once you have the competitive market analysis reports in hand, review the information carefully. Since there is a human factor in the generation of the report, errors do occur. By thoroughly evaluating the details, you can spot mistakes.
Then, you can select a sales price that accurately reflects the value of your home.
Have you made an FSBO sale? Tell us about your experience in the comments below!
Looking for more great tips from Suburban Finance? Check out these articles:
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- 5 Facts About Purchasing a Second Home