Your Second or Even Third Comparative Market Analysis
Chances are you probably had a CMA, a comparative market analysis, when you listed your real estate for sale. If you didn’t, you should have. What many home sellers do not realize is that there probably should be more than one CMA over the life of a home’s listing period.
Sooner or later your home is going to interest the right buyer and you will receive an offer. How you choose to respond to the offer, if you choose to respond to the offer, if you choose to counter the offer should be based on current, I repeat current, closed sale statistics and current market conditions.
The real estate market has been shifting and the inventory is tightening up. The market has undoubtedly changed enough for most home owners to get a current updated market on their property when an offer comes in. Whether the home was listed for one year or one month prior to the offer coming in a seller should receive an update on what has closed sale in the past six month time period, which properties are pending sale and how many active homes are now on the market competing with the subject property for the same buyer.
Every day that a home is on the market the sand is flowing through the hourglass. The comparable sales used on the day that a home is listed actually have a freshness date. If a buyer is getting a mortgage that freshness date has never been so important. The buyer’s lender is going to have an appraisal which is used to value the home as part of the mortgage process and the appraiser will only be using the fresh comparables, not the now stale comparables used to estimate the value of the home when it was listed.
If a home has been listed for three months at the time an offer comes in, there are three months of stale comparables which, in most circumstances, are no longer relevant. There are also potentially three months of fresh, new comparables which may be beneficial or possibly detrimental to supporting the offer price. These recent sales will be part of the new comparative market analysis.
Sometimes what a home seller perceives as a low-ball offer may be, in fact, based on similar closed sales which have occurred between the date a home was listed and the date the offer was presented. It may not be pretty but a closed sale is a closed sale.
So what’s a seller to do in this evolving market when an offer comes in? Demand a fresh CMA if your real estate agent hasn’t provided one so a decision can be made based on the same critical, current sales prices everyone else involved in the transaction is going to be using.
It probably wouldn’t hurt to have your agent ask the buyer’s agent to see the CMA they created when they chose their offer price. There are a few reasons this can benefit a home seller:
· To determine if they even did a CMA or they’re just tossing out offers.
· To verify that the buyer is actually using the most qualified, recent comparable sale prices.
· To make sure that there isn’t a closed sale that you and your real estate agent could have overlooked or not yet discovered.
Always get the facts and figures before you start negotiating or you could be negotiating a sale price which won’t appraise or, even worse, leave money on the negotiating table.
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Real Life in Bonita Springs is a project by Chris Griffith dedicated to writing useful blog posts for consumers about the Bonita Springs, Florida area. Find out what it is really like to live in Bonita Springs, Florida by reading about our fair city. You’ll get the latest in local real estate information, Bonita Springs real estate market reports and a little bit of humor. If you have topic ideas, feel free to request a story about the idea, after all, this site is just for you.
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