Comparative Market Analysis - How Does My Realtor Do That?
A Comparative Market Analysis is the process Realtors use to figure out the estimated market value of a property for sale.
How is it done?
1 ) Visit the property!
The first thing any Realotr should do when asked to determine a property value, is to physically visit the property in question. Visiting the property is key! It is simply not possible to accurately calculate the market value of a residential property without seeing the property.
2) Drawing on Local Expertise is Key!
It is difficult for any Realtor to do an accurate market analysis on properties within geographical territories that are unfamiliar. Therefore, a wise Realtor will recognize his or her limitations and refer the client to another Realtor who is an expert in the area. (There will likely be a "referral commission" agreement between the two Realtors.)
3) Determin a New Listing Price based on Relevant and Current Information.
After viewing the property, the Realtor will use MLS data as well as private/non-MLS data to look at comparable properties within the same georgraphical area. These properties could be current/active listings or properties that have sold within the past 30-90 days. Comparable date may include: square footage, age, type of construction materials, number of bedrooms, number of bathrooms, lot size, parking facilities, ammenities, etc. I use MLS data as well as information on private non-MLS sales.
In a stable market the sold price of properties will have more relevance and in a more volatile market, asking prices will be more relevant. How long these comparable properties have been on the market as well as overall market conditions and trends will also colour an analysis. Canceled, and expired listings will also have an impact based on their over optimistic pricing.
4) Present A Clear and Understandable Report with all Relevant Data that Supports the List Price.
Once the Comparative Market Analysis is complete, your Realtor will get a copy to you and will discuss and explain the analysis and its conclusions. It is important that the Comparative Market Analysis make sense to a seller. A Realtor should be able to make a convincing argument for their recommended list price based on the data.
WOULD YOU LIKE TO KNOW THE VALUE OF YOUR HOME in Vancouver? Call 604-763-3136 or Email ME for a Free Market Evaluation!