If you have ever bought or sold a home, chances are you know a thing or two about figuring out the value of a property. If the asking price is too high, the likelihood of the home being sold greatly decreases. On the other hand, if a home you are looking to sell is priced too low, you’ll miss out on potential profits.
To make sure a home is fairly priced, a real estate market analysis should always be performed, before buying or selling. This analysis will compare the values of similar homes in the area, for sale and sold, to come up with an accurate asking price.
You should always do a real estate market analysis, whether you are buying or selling a property and I’ll explain why. This analysis will help you understand the current housing market, how much properties like yours are worth and, if it’s an investment property, how much you can charge for rent.
The information gathered through a real estate market analysis or “CMA” helps the seller choose a listing price and helps buyers see if the asking price is too high, low or reasonable.
A CMA should always be conducted to make sure both buyers and sellers are getting a fair deal, based on the value of the property.
Don’t base your asking price only on other properties for sale, you also must base the market value on sold comparable data.
Yes, it is important to know what your competition is, but remember that asking prices may be completely out of sync with what properties are selling for.
Also check how long these properties have been on the market. If they have been on the market for a long period that tells you that they are asking too much or there is another problem.
The other big mistake sellers often make is using prices of properties for sale in other neighbourhoods. Property values vary dramatically from one area to the next. You can use such comparable (if none can be found in your area) however an adjustment must be made for the average difference in values between different regions.
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