What is a Comparative Market Analysis?
It is the process Realtors use to calculate the market value of properties they market.
How do I do a Comparative Market Analysis?
1 ) Visit the property!
The first thing I do when requested to do a Comparative Market Analysis is to physically visit the property. Visiting the property is key! In my opinion, it is impossible to get an accurate idea of the market value on a property without seeing the property.
2) Only Analyze What I Know. Local Expertise is Key!
I can only do an accurate market analysis on properties I know and am familiar with that are within my geographic area of specialty (Vancouver). If I am asked to do a market analysis on a property that is outside of my geographic expertise, I will ask to refer the client to an area expert. Always hire an area expert!
3) Calculate a List Price based on Relevant and Current Information.
Once I have seen the property, I look at comparable (Similar square footage, age, type of construction materials, number of bedrooms, number of bathrooms, lot size, etc) properties in the area that have sold in the last 30-90 days as well as nearby properties that are actively listed on the market. I use MLS data as well as information on private non-MLS sales.
In a stable market the sold price of properties will have more relevance and in a more volatile market, asking prices will be more relevant. How long these comparable properties have been on the market as well as overall market conditions and trends will also colour my analysis. Cancelled, and expired listings will also have an impact based on their over-optimistic pricing.
4) Present A Clear and Understandable Report with all Relevant Data that Supports the List Price.
Once I have completed my Comparative Market Analysis, I will email a report that will have all of the data that I used to come to my conclusion. I then call the client to discuss and explain the analysis and the conclusion. The Comparative Market Analysis should make sense to a potential seller and a Realtor should be able to make a convincing argument for the recommended list price based on the data. A Comparative Market Analysis should provide you with the data the conclusions are based on.
WOULD YOU LIKE TO KNOW THE VALUE OF YOUR HOME in Vancouver?
Call 604-763-3136 or Email ME for a Free Market Evaluation!
I WELCOME written comments and would love to hear your thoughts below!