When you’re ready to make an offer on your dream home, will you gaze into a crystal ball for mysterious guidance to determine the magical price that the sellers will accept? Oh, if only it were that easy! There are a number of factors to consider when formulating your offer, but one of the most important tools is the Comparative Market Analysis (CMA) prepared by your real estate agent.
The CMA takes the characteristics of your house (number of rooms, square footage, age, location, etc.) and compares it to similar listings in the area. You’ll see the prices of properties that are currently for sale, have recently sold, or have expired without selling. Current listing prices are irrelevant, but pay attention to the prices at which properties SOLD, because that’s what buyers were willing to pay.
Throw out the highest and lowest prices in the range and figure an average sales price for the remaining homes. Your agent will help you determine how those “average” homes compare to the one you want, so that you can adjust your offer accordingly. Be sure to note how recently those sales took place, too, because sales from six months ago are probably no longer relevant or useful for your decision. Your agent will help interpret the information so that you can make a fair offer likely to be accepted.
Elwynn Schwartz is the owner of Chattanooga Real Estate Consultants and may be reached at 423-894-3050.