Why a CMA is obsolete.
When selling, sellers rely heavily on the advice and input of their real estate agents to price their homes. Unfortunately more often than not, the advice given is based on an incomplete method of evaluating a property's value. This results in sellers netting thousands of dollars less than what is possible.
Most Realtors, at least in Omaha, do a Comparative Market Analysis (CMA) to arrive at a recommended asking price. This usually consists of limited information on three or four recent homes sales. Based on this inadequate amount of data, agents tell homeowners where to price their homes.
The problems with this method are many. First it does nothing to consider the various factors that affect the value of a home such as the amount of inventory of homes for sale, the balance of supply and demand, competition, market direction, financing options, and how proper preparation of a property can increase its value, just to name a few. Most importantly it completely ignores the seller's situation and time frame for selling.
Reviewing recent comparable sales is important but it is not the only factor to take into account. A thorough understanding of the local real estate market is needed in order to achieve the highest sales price. This is the difference between a real estate agent and a real estate expert.
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