Real estate market analysis is a useful process, especially when you plan to sell your home fast. One of the challenges home selling presents is the dilemma of pricing. If you set the price too high, you may struggle to find a buyer. If you set it too low, well, you might miss out on a good profit. Running an analysis to find the best price for your property can help you find the sweet spot for selling your home.
Real estate agents typically perform a real estate market analysis for you. However, it’s easy to do it yourself, especially if you are just testing the waters and don’t want to engage a real estate agent just yet. To help you complete one like a pro, we’ve outlined some easy steps below. But first, the basics, what is a real estate market analysis?
What is a Real Estate Market Analysis?
A real estate market analysis, also called a comparative market analysis or CMA, is the process of collecting information on similar properties in your locality for purposes of benchmarking your own property’s price. With information on similar properties, it’s possible to determine where your house lies within the pricing spectrum. CMAs are typically used to provide a subjective range of prices that match your property, which acts as a starting point for price discovery. It’s important to note that the prices you find may not be your final listing price. Other factors like repairs, upgrades, and market trends can significantly drive this price up or down.
Why You Need a Real Estate Market Analysis
If the price you get from a real estate market analysis is subjective, why do you need it? The answer lies in the information you seek. If you want to sell quickly, you can find out how much the homes in your area that sold quickly sold for. Similarly, if you plan to sell FSBO (for sale by owner), a CMA can give you this data.
Running a property analysis is a great way to get a rough idea of how much your home is worth, how fast it might sell, and whether you can do anything to increase the sale price. All told, all property owners should do some level of CMA to gain a basic understanding of the property market.
Complete Your Real Estate Market Analysis Like a Pro
Step 1: Assess Your Property
At this step, ask the following questions:
- How are the neighborhood and surrounding areas?
- What is the size of your house?
- What is the lot size?
- How many bedrooms, bathrooms, and rooms does it have?
- How many floors does it have?
- When was it built?
- What amenities and features does it have?
- How close is it to local businesses and amenities like malls?
- Has it been recently renovated or improved?
Step 2: Analyze the Original Listing Price
Going back in time can help you find out what has changed between your property then and what it is currently. If you can, find the original listing and analyze details like price, amenities, photos, improvements, age, and description. Then ask yourself, what has changed? If the house has changed for the worse, that may pressure your price downwards. If you’ve made significant improvements, you can be sure to get a better price.
Step 3: Analyze Property Estimates
Home selling online tools like those provided by Zillow, Redfin, Eppraisal, Chase, and Realtor.com offer data-driven house value estimates. Although such estimates are subject to disparities from home to home, they give a good idea of what your house is worth.
Step 4: Analyze Comps
Comps are recently-sold, on-market, pending or expired listings in your neighborhood that have a similar number of bedrooms, rooms, and bathrooms, lot size, and square footage. If you cannot find an exact match comp, look for the closest match. If possible, only analyze those listed within the last three months and within a three-mile radius. During your analysis, try and find any factors that made a similar house sell higher or lower than others, and ask questions like: How much are they listed for? What features do they have? How long have they been on the market? Looking at comp listings not only gives you a pricing trend, but it also tells you whether it’s a buyers’ or sellers’ market. Such data can help you price your property in line with prevailing trends.
Step 5: Combine Everything
Now that you have a fair amount of data, try and deduce the most common pricing trends for similar properties. Start by calculating the price per square foot for all the homes you analyzed (divide price by square footage). Add these all up and divide by the number of properties you analyzed to get the average price per square foot. Now multiple your property’s square footage by this price, and you’ll get the average price.
The average price you get from the home selling real estate market analysis is precisely that, an average, and can go up or down depending on specific factors associated with your property. Because of this, it’s best to consider the price you get as more of a range than a hard and fast price. That way, you can easily raise or reduce it once you decide to put your house on the market.
Sell Your House Fast for Cash
A real estate market analysis may give you an excellent place to start in terms of pricing, but it may not help you sell your home faster. If you want to jump this process and go straight to an offer price from a qualified buyer, Need Help Selling Homes is your answer. We do the analysis and give you a competitive cash quote within days. If you accept it, you can close on the house within weeks of deciding to sell it. For more information, contact us today.