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How Do I Complete My Home's CMA When Selling on My Own?

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Find similar homes in your local area that have sold recently to use as comparisons.

While you don't need to use only sold homes on the same street, you do need to find similar homes in the surrounding area.

Copyright 2000 by Roger Wollstadt
Question: How Do I Complete My Home's CMA When Selling on My Own?
When selling your house with a real estate agent, the agent will do a CMA, Comparative Market Analysis, on your home to determine the house’s value. This will give you the information you need to determine the best listing price.

What happens if you are selling on your own, without the assistance of a real estate agent?

Answer:

Some of us are honestly torn about whether to list with an agent or not. As a result, we will often end up getting a CMA from real estate agents when we interview them. Most agents offer a CMA for free, hoping to get the listing. This happens usually in one of two ways:

  • As you struggle with the decision, you will meet with agents so see if it's worth paying the commission and letting the agent handle the sale. Is it better to work with someone who has the needed expertise? In either case, the agent will usually provide you with a CMA, in part to help convince you to list the home with them.
  • If you have already listed on your own, you will most likely receive both phone calls and postcards from real estate agents offering to help you sell quicker and for more money if you hire them to sell the home. The agent will usually just ask to meet with you and explain how they can help. They will usually come to the meeting with a CMA.

Why would they do this? They hope by offering to help you, you will consider using them if you decide selling by yourself is not working or is just too much for you and your family. If you haven't yet made a decision, you may realize just how much work is involved and decide it really isn't for you. In addition, if you continue to sell on your own, but are impressed with the agent, you may pass their name along to someone who is looking for an agent. However, be respectful of the time of real estate agents. Don't pretend to be interested in using one just to get that free report. If you really want a CMA performed, just call an agent and be honest. Some will do a CMA for you for a small fee. Some may not charge you, with the condition that if you do decide to list with an agent you use them.

Do Your Research

However, you can determine the market value of your home on your own, with a little bit of research. The sale prices of homes is public knowledge, available at your local public town or county office.

Many sites let you search for homes that are currently on the market. While these prices are useful to you, they are not as useful as the actual selling price of homes. A seller can list a home at whatever price they want and that doesn't necessarily mean that is the true value of their home. Meanwhile, sold homes tell you exactly what the market (buyers) are willing to pay for that property.

There are also sites, such as Zillow and Trulia, that will show you homes for sales, available rentals, sold properties, along with prices for all these categories. < br/>One word of caution when using these sites: do not rely on the estimated price of your home given by the site. Each site calls it something different. For example, Zillow calls it the Zestimate. If is based on formulas and computer generated information about homes in the area that have sold. But if no similar homes have sold, or at least none in your area, the data used to calculate the estimated value of your home may not be accurate. The system may have to use homes that are not very similar to yours or are located farther away than what is useful for determining an accurate estimate.

These sites are great for finding out which homes are currently for sale and/or rent, as well as those that have recently sold, along with their selling (or rental) price. You can be reasonably sure that these prices are accurate. In rare instances there is an error in information entered by the human doing the data entry.

Research Info That is Most Important

Overall, you want to focus on homes that have already sold in your area. Make sure the homes are within the same area as your house and are similar in as many of the following categories as possible.

  • Square footage
  • Acreage
  • School District
  • Number of bedrooms
  • Number of baths
  • Condition of home
  • Age of home/year built
  • Updates or renovations (such as a brand new kitchen or granite counters)
  • Type of garage
  • Location of home -- whether it's on a main road or rural street; if it's close to the road or set back far from the road
  • Condition of property/land
  • Needed or completed updates -- siding, roof, windows, doors
  • Amenities such as the following: a pool, front porch, a den or office, hardwood floors, granite or stone on counters, fireplaces, and/or floors
  • Date the house sold -- ideally was sold within the last 6 months

Try to match your home to other homes sold on as many of these factors as possible. If your home has major features other homes have or is missing features that others do have, add or subtract an appropriate amount to reflect these differences. And no, this is not an exact science, but if you ask several people to do this, they should come up with home values that are fairly close.

Relationship Between CMA, Pricing, and Staging

The reason a CMA is so important in the topic of home staging is that accurate pricing is an extremely important step when staging a home. Many people really don't understand how home prices are determined. Advertising your home with the wrong listing price can keep the perfect buyers from seeing or even becoming aware that your home exists.

The market (buyers) determine home prices. Demand determines what people are willing to pay for a home. While we'd love to think that all the blood, sweat, tears, money, and emotion we put in the house should count for something, it usually doesn't. Yes, improvements will add value to your home. But if you spend $70,000 on a brand new kitchen update, you can't add that to the price you paid for the house when you bought it, and then add all the other updates and even the maintenance you did, and come up with an accurate price. Some things are expected in a home and you don't get to ask money for them.

If you had a leaky roof and needed to replace it, you don't get all that money back. People expect a home that does not leak. If you had a structural issue with the foundation and had to fix that, you can't expect to ask more money in the asking price because you had to do that. Buyers expect a home with a solid foundation. However, if the foundation had structural issues, you would lose money off the asking price if the problem wasn't fixed.

Regular maintenance is also expected and you don't necessarily get back that money you spent cleaning your furnace and chimney each year. However, you may get an offer closer to the asking price because these little tasks show the buyers that you take good care of your home, and this gives the buyers a sense of security that the home is in good condition and was loved and cared for. The home shows better. Those things do add value.

Final Tips

When you stage your home and perform inexpensive updates and modifications, you usually will get back that money in the asking price. That is why staging is so important and why so many of the staging steps and recommendations will get you a great return on your investment.

Thoroughly researching the market and coming up with an accurate asking price is a critical step in the staging process. An inflated price can lead to a home that spends a longer time on the market and ultimately sells for less than it's actually worth -- less than what you would have gotten if you listed it at the correct price initially.

Don't skip this important step of completing a CMA. This will enable you to list your home for what it's actually worth. That is what will help you sell your home quicker and for the best price.

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