Selling a home is more involved than putting up a sign, setting a price and crossing your fingers. There is an element of suspense, and it is not a scientific certainty, but it should not be a gamble either. There are proven ways to minimize days on market and maximize the selling price.
On the other side, finding a good deal to buy can be frustrating when the field is crowded. An offer should rest on more than emotion. Knowing the history of local trends is both educational and financially smart.
One of your best tools is a Comparative Market Analysis, or CMA. When you first consider selling, you already have some sense of value and a ballpark for your asking price. A thorough look at recent transactions gives you an honest read of local conditions. Month-to-month and year-over-year figures for sales, price adjustments, pending sales and withdrawn listings reveal the trends, and conditions can shift from one month to the next.
Statistics vary by neighborhood, and a volatile market is affected by outside factors. In the hands of a professional, the CMA offers an in-depth look at local sales, highlights trends, and details the factors that benefit sellers and buyers alike. It is also an effective bargaining tool: neighborhood values, homes on the market, turnover, average price, age and demographics all inform the decision.
A market analysis can be a simple listing or a detailed compilation of current listings, asking prices, recent price adjustments, pending contracts and completed sales. Days on market, the average time from accepted contract to closing, and the comparison of selling price to listing price are all valuable to sellers and buyers.
Neighborhood comparisons add insight, especially appreciation rates for older homes versus new construction, the number of cash sales, rental rates and foreclosure rates. Statistics provide the facts, but some interpretation is inevitable, so work with an agent whose experience and judgment you trust.
Professionals speak in ranges, probabilities and averages. In any transaction the goal is to walk away with the best deal possible, and a comprehensive market analysis helps you do exactly that.
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