Most estate agents will tell you that correct pricing is the key to a selling a property quickly and easily – and many will offer to prepare a comparative market analysis (CMA) to help sellers determine the right price.
But what is a CMA and how should it be used? “The short answer”, says Gerhard Kotzé, MD of the RealNet estate agency group, “is that a CMA is a report that gives an estimated sale price for a property given current market conditions”.
“Consequently, it is of value to both sellers and buyers – and to those who may be planning additions or alterations. However, a CMA needs to be properly prepared by an agent knowledgeable about your specific area to be of any real use, and you need to know what information to extract from it.”
The first step in compiling an accurate CMA is for the agent to walk through your property. This needn’t take long, and your home does not need to be prepared as for showing. However, the overall condition will affect the estimated price, so you should let the agent know if you’re planning some repairs or improvements prior to selling.
The second step is for the agent to consult Deeds Office, agency records and property portals for information about similar properties in your area that have recently been sold; pending sales they know about, (where offers have been made but the property has not yet been transferred); active and expired listings.
“Sold records and pending sales,” he notes, “will provide a reliable indication of the current sale price range in your area, and of what your asking price should be if you hope to sell quickly. But you also need to know the asking prices of other properties currently on the market – and in competition with yours – and those of expired listings, which will usually have failed to sell because they were overpriced for the market.”
Kotzé says it is the nature of the SA property market, where agents mostly represent sellers, that CMAs are usually prepared – free of charge – for property owners contemplating a sale. “Indeed, the third step usually taken by the agent is to consult with the seller and use the CMA to set an asking price that is as close as possible to the probable selling price”.
“Buyers can, however, request a CMA on a property they are thinking of purchasing – and would be well advised to do so if they are unfamiliar with the area or have not had a chance to view many listings”.
“And home owners contemplating major renovations can also make good use of CMAs to discover how much they can spend without over-capitalising for the area. The estate agent who sold them their property will usually be happy to oblige but they can also buy automated property value reports from Property24 and from Lightstone“.