First we select comparable properties out of those sold recently and in the neighborhood or nearby. These “comparables” or “comps” are selected based on similarity in features, location and characteristics with your home. They must have been sold as recently as possible so the sold prices are of maximum value.
We then do a go through a detailed “adjustment” process to adjust their sold prices for any differences with your property. If a home has one more bedroom than yours, we would adjust that property’s sold price downward for the value of one bedroom to make the comparison “apples to apples.” We make adjustments for garages, bathrooms and other major features to bring our comps to closely compare with your home. Then we use those sold prices to arrive at a preliminary listing price for your home.
We say “preliminary” because we have another CMA step.
CMA of Current Listings
Now we get more comps, but instead they’re properties currently listed and your competition. We go through the same adjustment process, and we come up with another, possibly higher or lower, price suggestion for your home. This second CMA gives us more up–to–date information about the market which could cause us to lower or raise our preliminary list price to adjust to the current market. Using the two CMA results and an experienced analysis of your home’s position in the marketplace, we can set a listing price that will get the job done.