A detailed market analysis in today's real estate market is NECESSARY!

It's time.... You've contacted an agent to do a price analysis of your home, and they bring you a nice little "fluffy" CMA  that has a few homes that are on the market, a few that are under deposit, and a few more more that sold, all spiral bound, in full color, with the marketing plan built right into it.

All great, but is it enough information to price your home correctly? Probably not. First of all, those pre-packaged market analyses are completed at the touch of a few buttons on a computer program without a lot of thought process going into it. Furthermore, some of thesse programs only allow three to six comparables per listing status.  (active, pending, and sold)

Even if the agent hand picks the comparables for you, the program itself has its limitations. The whole presentation might look lovely, but the accuracy of pricing may be a whole other ball game- and then there's the standard marketing plan that will sell every house in town which is nicely included in your presentation with pretty graphics.  Even a novice knows that the marketing plan that is used to sell the house next door cannot be correct for your home, too.

A market analysis that shows just five or so listings in different status categories does not indicate a price for your home. Rather, it indicates some kind of average for the listings chosen.  I do not consider those a real pricing analysis, sorry.

Real CMA's are kind of boring, face it- unless it's my animated self going over all of the information for you!  If you happen to have an agent come over who gives you one of these fluffy CMA's, use it as a placemat. It's not worth anything else.

A market analysis should be so detailed  that even YOU don't have to guess as to what the price of your home should be. It will be inherently obvious- no guessing required. If you want to know the true price of your home in today's market, contact me. No fluff unless you want it, no hard sales tactics, just correct information. :)

 Tweet

Which is better to find out my home's market value, a CMA or an appraisal?

What's the difference between a CMA and an Appraisal?

Both a CMA (Comparable Market Analysis) and an appraisal are important to determine market value. Which one you choose for your present needs is up to you. You may require both in some circumstances.

When a  REALTOR performs a CMA, which is comparison of a variety of active listings, pending listings (to see how the market is trending)  and sold listings within the past six months as they can best compare to your home, with adjustments as necessary. The agent may NOT quote an exact price, but must give a range of value. There is no cost to this service- the agent  hopes that if you decide to sell, that you will hire them. They will also give you a detailed marketing plan including positioning your home in its best light in the marketplace.  Take note: Some agents are starting to charge fees for  CMA's. Ask before you invite them over. CMA's can range greatly in pricing from agent to agent, given that agent's experience and expertise in pricing. It is important to meet with an agent familiar with your neighborhood and town.

When you hire an Appraiser to give you a price on your home, or evaluation, that appraiser will perform much the same research as an agent, however he/she is also required to use a standardized form, which holds more information thatn most CMA's. Another difference is that the appraiser will typically only use what they determine are the three most relevant active listings, and three most relevant sold properties within the last six months, within a specific radius guideline.  An appraisal will have an quoted market value price- rather than a range,  additional photos,  your Schedule A from the deed (metes and bounds description),  the volume and page number as recorded in town hall of your purchase,  standardized calculations and adjustments, mortgage amount, and the reason for your appraisal request clearly on the form. Expect to pay anywhere from $300- $600 for an appraisal, depending on the type of home you have and where it is.

Both Realtors and Appraisers are licensed through the state of Connecticut and must complete continuing education to maintain their licenses. Both can give you very accurate opinions of value. It is imperative  that no matter which professional you hire, that you make sure that they are very familiar with your area. I sometimes see banks  hire appraisers for properties where the appraisers that they send out live as far as 50 miles away. They just can't possibly know your area well enough to do the best job. Local Appraisers are best, if you need to go that route.

Tweet

How does market time affect pricing on a house for sale ?

When you are looking at houses, pay attention to the market time for that particular home when you look at it. That number is pretty much hidden in plain site at the top of your MLS listing fact sheet, and it would appear as trivial as MT 156. As a buyer, you may not be aware that MT 156 means that the market time is 156 days on that listing.

Why would this matter to you, as a buyer? Two big reasons! SALES PRICE and TERMS OF SALE I am assuming that your agent would have been educating you as you are looking at homes as to what the average market time is for a property in the town(s) that you are interested in.  If the average market time in your preferred town is 75 days, well then, you may have an built-in opportunity for additional price negotiations. You may also be able to negotiate terms that are more agreeable to you.

This involves some research from your agent, like checking on the homeowners financial status, the loan status on the property, finding out the reasons for the move from the listing agent, the sellers motivation, whether or not there have been previous offers, and checking the listing history of the house.

I conduct this research and pay membership fees to various sources  to find out this information, some of which is not readily available or easily available to the public.  Obtaining  information  from the listing agent is quite helpful, and most llisting agents will tell buyer agents about the sellers motivation. Honestly, I feel that is a breach of  fiduciary responsibility that I do not cross when I represent a seller - but, when I represent a buyer I do not have a fiduciary responsibility to that seller, so my loyalties are with my client.

Knowing town statistics and market data besides having a market analysis on the home you want to buy is very important. That is why I include them for  Easton, Fairfield, Norwalk, Trumbull and Westport on a weekly basis.  I conduct market research for  other towns in my service area, I just do not publish them online. ... and truly, you shouldn't ever have to ask your Realtor for this information- if you do, it's time to change agents and get the professional advice that you deserve.

How often should your agent conduct a market analysis of your home?

The real estate market changes daily, and certain local, national or even global events can affect your market value.There could be a recent sale that strengthens or even enhances your position in the marketplace, or a recent sale that hurts your possibility of obtaining the price that you and your agent once considered appropriate.

When a bank requests an appraisal (either for a buyer or for a re-finance) the appraiser is instructed to utilize only up to 6 months of prior sales.  So an appraisal conducted last year on your home is not an appropriate analysis for today.  If you look at my market statistics reports, you'll see that  there are changes weekly, and those changes need to be addressed as they pertain to your home's value. So the short answer is AS OFTEN AS NEEDED. That could be 15 days from the time you list your home, or every 30 days that your home remains unsold.

Zillow says my house is worth WHAT???

I got a call today from a potential client who wanted to know what her home was worth, and she quoted me a figure from Zillow.com. I'm glad she couldn't see my face, because my jaw just about dropped. It wasn't overpriced, it was SEVERELY underpriced.  Zillow is all over the lot as far as pricing is concerned.

Zillow IS a good informational site, I'll give it that, but it is no substitute for a local real estate agent's price estimate. Let me explain why. There are no local agents deciphering the local market as it pertains to your house that  let the Zillow pricing module know the neighborhood nuances, which make a BIG difference.

For example, there may be one side of your street that is more desirable than the other side. Zillow doesn't know that. There are perceived or real neigborhood boundaries that Zillow doesn't understand, and cannot effectively price a home without this knowledge. There are school districts and boundary lines that may be different for you than they are for your neighbor. Zillow doesn't know that either.

So although the immediate price that this woman got when she punched in her address was way too low, yours could be way too high. At any rate, it's hit or miss when the value of your home is concerned.

Don't trust your biggest investment to an algorhythmic equation. It doesn't work. What you need is a local agent (LIKE ME!) to properly assess your homes worth, and to give you an honest and true estimate of value. All you have to do is contact me.