Whether you are buying or selling a home, you have to know what that home is worth. And knowing what it is worth means knowing what people are actually willing to pay for it – the fair market value. Often, figuring out that value is no small or easy task. There is, however, an established way to do it – a way to arrive at a fairly accurate estimate of market value. Here, then, are some agent tips for creating a CMA in Northern Virginia.
What Is a CMA?
A Comparative Market Analysis (CMA) is a thorough, detailed report (typically prepared by a licensed real estate agent) that is used to arrive at the estimated value of a property. “The calculations,” according to the professionals who prepare CMAs, “are based on the information you collect from recently sold, active, and expired listings of similar properties, in similar areas. The next step would be to compare the calculated average market price to the price of the property in question to determine the price of the property to list.”
Typically, creating a CMA is an essential step in either of two cases. A CMA is needed when someone is looking to sell or is preparing to list a property and needs to know how to price it. The other case is when someone is interested in buying a property and needs to know exactly what it is worth in order to make an offer (or not).
Steps in Creating a CMA in Northern Virginia
Creating a CMA typically involves a series of steps, including:
ASSESSING THE NEIGHBORHOOD
Before even visiting the property, agents usually assess the neighborhood where it is located. The idea is to get a handle on all the things in the surrounding area that can add to or detract from the property’s value. Usually, this means considering things like amenities and schools and the proximity of things like industrial areas and garbage dumps.
EVALUATING SIMILAR LISTINGS
The next step in creating a CMA in Northern Virginia involves carefully examining similar listings, typically on reputable real estate sites in your area. These listings will include sold, active, and stale listings, but they will give you an idea of the property in question’s worth – if, that is, they are listings for similar properties. Just examine as many as possible and note the prices.
USING SOFTWARE TO CREATE A PRELIMINARY REPORT
Your next step will be to create a preliminary report using any of the available software options. The data you’ll need to plug in to get a rough idea of the property’s value will include:
- Recently sold similar properties for an idea of proper pricing
- Stale listings to know what prices are too high
- Currently listed properties
- Homes with similar features, especially a similar number of bedrooms and bathrooms
- Additional features and amenities like a pool
- Similar homes in the same neighborhood
ESTIMATING THE PRICE PER SQUARE FOOT
Now that you have a list of similar homes in the area and their prices, it’s time for the next step in creating a CMA in Northern Virginia. And this step is to use the selling prices of these homes to arrive at per-square-foot prices. You do this by dividing each property’s selling price by its square footage. Then just average the square-footage prices and multiply that average by the total square footage of the property under consideration.
ASSESSING THE PROPERTY
You should now have a pretty decent rough estimate of the property’s value, so it’s now time to actually view it and assess it in person. You need to carefully assess the condition of the property to see if there is anything that could reduce its market value. If you do find anything like this, then you need to make the necessary adjustments to your value analysis.
Some of the things to assess are:
- Overall condition and age
- Needed repairs and/or renovations
- Added amenities
- Curb appeal
- Negative points and drawbacks
- Accuracy of the neighborhood assessment
CREATING THE FINAL CMA
The final step is, of course, to create the actual CMA report. You do this by compiling all the data you’ve already assembled:
- Neighborhood research
- Prices of similar listed properties
- Accurate square-footage price
- Findings of the property assessment
Ask for Help
Sure, creating a CMA in Northern Virginia is something you can do yourself. It’s pretty labor intensive, but it’s not rocket science, especially when you use the agent tips we’ve laid out here. Still, this is just an overview, and there’s more to it than most laymen want to tackle. So why not get some assistance from your local real estate professionals. If you are buying or selling, you’re likely better off with respect to pricing with a qualified agent on your side. We can provide the valuable help you need to hang on to more of your hard-earned money if you’re buying and to sell for more if you’re selling.