The Importance of an Updated Comparative Market Analysis (CMA) to Your Pre-Approval

When one is selling their home and subsequently buying another, it doesn’t necessarily come quickly to mind that it takes more than online home value calculators to provide an estimate of what you’ll make on the sale of your home. Even the online seller’s net sheet calculators can only provide an estimate of what your proceeds will be from the sale of your home. You’ll need an updated Comparative Market Analysis (CMA) and a couple Seller’s Estimated Net Proceeds Worksheets to get the figures you need. Knowing what your net proceeds will be is important not only to determine what your down payment will be on your next home purchase but it’s also important to the legitimacy of your mortgage pre-approval.

The basis of your next home mortgage approval will take both your down payment and your cash reserves into account in pre-underwriting and in underwriting. Whatever proceeds from the sale of your home you may not use for your down payment will be factored into your cash reserves and used as a positive compensating factor in approving your loan. But here’s the catch, . . the assumptions on your down payment and cash reserves have to be conservative or at least accurate to ensure that your pre-approval is as good as the paper it’s written on. If the anticipated down payment figures from the sale of the home and cash reserve calculations are wrong, so is the pre-approval.

Only your agent can give you an accurate and up to date Seller’s Estimated Net Proceeds Worksheet as only they have the local knowledge and vendor cost familiarity to give your reliable figures. It would be wise to request 2 net sheets. One at your listing price and another based on a conservative outcome from your home’s sale. Once you have these, get them to your preferred loan officer and base your pre-approval on the more conservative of the two.

Using this method, you can be confident in your financial planning on your home sale and your mortgage pre-approval at the same time so call your preferred Realtor and get your accurate and up to date Comparative Market Analysis (CMA) and Seller’s Estimated Net Proceeds Worksheets under way!