Have you ever wondered how real estate agents calculate your value? It’s actually quite a process.
Whether you’re buying or selling, price is probably one, if not the biggest, determining factor in purchasing or listing a property. Real Estate Professionals rely upon “comps” to calculate the value of a property. “Comps” are short for Comparative Market Analysis. Also known as a CMA, agents will utilize the MLS, Multiple Listing Service, to craft a personalized CMA report that features several other properties that will inform the value of a specific property.
The goal of a CMA is to have an in-depth understanding of what the market value is. There are three prices for every home, premium, market, and wholesale, and the market will determine which price is realistic. A CMA will determine the subject property’s value by comparing it to other properties with common qualities and features. A good “comp” focuses on four main factors: location, size, amenities, and condition.
Appraisers focus on the same factors, too, so take into account the property’s year built, architecture, interior, and exterior finishes and updates.
The right comps make a valuation as accurate as possible, with the analysis giving you like figures to set a listing price.
Remember, automated valuation calculators, like Zillow’s Zestimate, aren’t exact. They can pull inaccurate, outdated or even false data from public records, whereas the MLS gives you a more complete picture from which you can draw comparable figures.
Contact us so that you can get a realistic assessment of a property’s true value.