A Comparative Market Analysis (CMA) is essential to determining the value of residential property. Location and characteristics of the property are the key elements in determining value. Therefore, the basis for valuation is assessing similar properties in your area. The market analysis takes into account the amount received from recent sales of comparable properties and the quantity and quality of properties currently on the market. The desired end result is to find a price that will attract a prospective buyer in a reasonable time.
Once the value of your home has been determined, you can decide on an offering price that will achive your goals. Generally, the price should not exceed the value by more than five percent or potential buyers may not even make offers. Naturally, if you want to sell quickly, your asking price should be close to the value.
The following are a few things to keep in mind about pricing:
- Realistic pricing will achieve maximum profit in a reasonable time.
- Your personal cost or profit desire is irrelevant; the market determines the price.
- The cost of improvements in most cases exceeds the added home value.
- Homes that remain on the market for a long time do not get shown.
- Typically, a home priced right from the beginning achieves the highest profits.