Is the Price Right? Keys to a Thorough and Accurate CMA
So now you know when to have the difficult pricing conversations. But how will you set that price, make your case for it, and ultimately, make the close? A detailed CMA is the key—leave no stone unturned, and cross your fingers that the market will react as you’ve keenly predicted.
- Start with the basics—homes of the same type (single family home/condo/duplex, etc) with similar square footage, number of bedrooms and bathrooms, garage spaces, construction year, renovations, extraordinary amenities (such as a pool or unique terrace balcony), and more.
- Make sure to know the property’s previous sale history and applicable local taxes and regulations, especially if you’ll compare the property with others in different municipalities.
- Consider micro-market trends, via both your property’s location and characteristics. This is especially true when referencing homes that have already closed—an accepted offer on a near-identical home right next door (an admittedly rare scenario) even just a couple months ago could already be out of date for the area. Get to know the neighborhood and those of your comp properties, as the old adage about “location, location, location” can take a huge amount of guesswork out of why a property’s valuation went up 20% in a year. No, it wasn’t that the linoleum flooring became trendy again.
- Don’t forget to also evaluate comparable unsold listings, to evaluate why those didn’t fit the market, and listings currently on the market. Current listings obviously help dictate your listing price depending on differing features, but also let you pretend to be your hypothetical buyer. How interested would you be in your own listing?
- Put it all together into a clean report, detailed and individualized, yet simple enough that a first-time seller could browse with confidence. You won’t want to overload them with info, but this will equip you to quantitatively defend your claims.
When presenting, remember that nobody likes a know-it-all. Rather, you’re a powerful team: between their charming, marketable property and your industry expertise and closing ability, you’re ideally positioned for success.