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Center Staged Property: What is a Comparative Market Analysis?

Here's what you need to know to get the most out of your home's value.

A comparative market analysis, also referred to in the real estate industry as a CMA, can provide valuable information to help you evaluate the listing price of your property. Before listing your property, it’s important to know its value based on the current market conditions and comparable properties sold.

Your real estate agent can prepare a CMA including the following criteria:

» Active on the market

» Pending sales (in escrow, not closed)

» Sold properties from the past six months

Active Listings

Active listings are properties currently for sale. These listings are not indicative of true market value, but they are potential properties that buyers may consider. The listing price does not reflect the market value as many properties sell for less than first listed.

Pending Listings

Pending sale properties are under contract and in escrow. They have not yet closed, so they are not yet a comparable sale until sold. The accepted price of the pending property is generally not disclosed until the property is closed. Sellers can request that the selling price is not publicly recorded.

Sold Listings

Most recently closed properties are your comparable sales. Real estate agents and appraisers will use the previous six months of sales when appraising your property for the buyer. Comparable sales are a closer indication of your market value.

Property Differences and Adjusting Values

When comparing similar properties the value is adjusted up or down.

» Add or subtract value for difference in lot or acreage size.

» Add or subtract value for difference in house square footage as well as feature differences, such as bedrooms, baths, garage, etc.

» Good location and property views add value to a property.

» Property condition and age affects the value of a property. This includes structure and land. Properties are usually rated Fixer/Average, Average/Fair and Good/Excellent.

» Highly rated school districts add value to a property.

In addition, the current number of comparable listings on the market can determine home value. The fewer the listings, the more valuable your home, especially if it is in a desirable location. Supply and demand may also make your home worth more.

In the end, it is important to know what your home is worth in relationship to comparable properties, and in order to price your home to sell.

Bunny DeLorie and John Sween are the Center Staged Property team at Prudential California Realty. E-mail your real estate questions to [email protected] Click here for more information.

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