Home values fluctuate. Americans have learned the hard way that what a home is worth today can change quite rapidly. The best way to determine the current value of your home, or a home you may be considering purchasing, is with a real estate market analysis, or CMA (Comparative Market Analysis) as it is called in the real estate industry. There are several ways to get a real estate market analysis. You can do it yourself by using the tools at the various real estate websites, you can order and pay for an appraisal, or you can call a professional real estate agent who will supply one to you free of charge. It is generally suggested that you get at least three CMAs from three agents before accepting any as being reflective of the value of your home.
Ask friends, co-workers, neighbors and family members for the names of real estate agents they have worked with in your area. If that doesn't work, call agents who have homes listed in your neighborhood. Get at least three agents' names and telephone numbers.
Call each agent and tell her that you are considering selling your home and would like to know the value. Set up an appointment for the agent to come to your home to preview it.
Clean the home before the agent arrives. For the agent to determine the value of your home she will need to be able to view it as it will be when it is on the market.
Show the agent around your home the same way you would show it to a potential buyer. Point out all the highlights and any improvements you have made. Mention any that you plan to make before placing the home on the market. The agent will then return to her office to perform the analysis.
Make another appointment for the agent to return to your home to present the market analysis. Upon completion of the presentation, and depending on the assertiveness of the agent, you may feel pressured into signing a listing agreement with the agent. Resist the pressure tactics and explain that you will be interviewing other agents. Let the agent know that you will call her after you have made a decision.
Repeat this process with at least two other agents. After your interviews, you will have three real estate market analyses from which you can infer the value of your home.
Tips & Warnings
- The CMA should include properties comparable to yours that have sold in the last six months. It also should have a section on homes available, in your area, to give you an idea of your competition and of the available housing supply. Make sure that the agent has based the value of your home on the sold comparables because only sales prices can determine market value.
- Be wary of a market analysis that places the value of your home high above those of the two others. Some agents will try to "buy a listing," as it is known in the real estate industry. This means that she has inflated the value of the home to get you to list with her. The home will be overpriced and the agent will eventually ask for a price reduction. In the meantime your home will have lost the most valuable period of marketing, when it is fresh on the market. The value this agent has come up with is invalid, so throw it out and use the two other CMAs.
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