If you are going to list your home for sale, you need to come up with a price. You can spend the money to hire an appraiser, but an experienced real estate agent can do something even better. A Comparative Market Analysis is the best way to put your home on the market at the highest price.

What is a Comparative Market Analysis?

A comparative market analysis evaluates the sale price of similar properties. It then adjusts it for the differences between the homes. For example, a three bedroom two bath may be virtually identical to the home being priced, but it may need its price adjusted based on location.

Variables for Consideration

  • Neighborhood: Curb appeal is very important, but so is the curb appeal of the entire neighborhood. If there are many manicured landscapes and garaged vehicles, it is sign that the neighborhood is of higher quality. If the lots are small and homes are very close to each other, this can decrease the “neighborhood value.” Lastly, proximity to other locations can be good or bad. If a home is near grocery stores and services, it may be good. However, being near a factory or a landfill may be negative.
  • Estimated Property Value: This is a good starting point for setting a home price, but estimated property values can be very wrong. Still, this number is a good starting point, and it can be adjusted based on other variables.
  • Original Listing: How much you paid for your home can impact the pricing strategy based on how long you lived there and what improvements you’ve made. This gives credence to the value you end up placing on your home, and potential buyers can understand the variance from your purchase price.
  • Similar Home Sales: When you are doing a “market analysis,” you must evaluate the market. This is where the price of similar homes comes into play, and it is a good indicator of what home buyers are willing to pay for your property.
  • School Zones: The quality of schools available for those living in your neighborhood also indicates value. Elevated schools are located in more affluent communities, and they are a sign of other positive neighborhood attributes such as low crime.

Put it All Together for an Accurate Market Analysis

Your real estate agent can put together all of the variables, and with his or her local knowledge, develop a price point for your home that will sell. You want the highest price possible without deterring potential buyers, and a comparative market analysis will help you to find the best price.