In today’s economic landscape, the cost of everything is important. We’re all watching our pennies closer than ever and getting the best “deal” is no doubt on all of our minds. The same applies when we decide to list our home.

What’s interesting is that even in the most favorable markets, understanding what determines the price of your home is a commonly asked question. Whether we’re deep into a buyer’s market or a turning a corner into sellers market, getting the most amount of money for your home is always a top priority. But what determines the price of your home? When an agent sits down at the table and tells you how much your home is worth, where do they get those numbers?

Let’s take a look at how homes are correctly priced:

Comparative Market Analysis (CMA): A comparative market analysis is an estimate of the value of a property based on an analysis of sales of properties with similar characteristics. The CMA is useful for both buyers and sellers. Buyers, for instance, want to know the cost of nearby homes to ensure they pay a fair price and sellers want to know the value of their home so that they can get the most profit out of their home as possible.

Active and pending listings are important to look at in a CMA and will give you a glimpse of how other homes that are currently on the market or are in the negotiation phase are priced. As a seller, knowing what buyers are truly paying for will help you set pricing expectations ahead of time. Pending sales are a great indicator of market movement (also known as days on market) and will help you price your home to sell, not sit.

Sold listings are used by the appraiser which will be a large determiner of your price – so spending time on this portion of the CMA is important for setting expectations about price.
Sometimes homes are taken off the market. Often they are priced too high, they sit too long (which is usually directly related to price) or a seller decides they no longer want to sell. Expired listings are another area of homes examined because the expiration will give you guidance on where NOT to price your home.
Exploring comparable sales gives you a glimpse of homes that closely resemble your home in square footage, date built, location as well as amenities, upgrades and condition.

The value of your home is an important first step as you make the decision to sell your home. Wouldn’t you want to know that? Give me a call to receive a free CMA.