Carol decided she wanted to buy a house. But first, she needed to sell the condo she bought 5 years ago.
How should sellers decide on the listing price for their homes?
Sellers who choose to list their property with a broker can ask for a comparative marketing analysis (CMA). A CMA looks at all the variables in a home: number and size of rooms, number of bathrooms, number of square feet, lot size, location, and any special amenities the home may have.
A proper CMA will also provide the seller with a listing of comparable properties in the neighborhood and their recent listing and selling prices. With “comps” to back her up, the broker will usually put a suggested listing price at the back of the CMA. Usually this price reflects the broker’s analysis of past sales, how the home compares to others that have sold mixed with a little bit of intuition.
How does the process work? Usually a seller will request a CMA from each agent he or she interviews before choosing who will represent the property. Before the interview, the agent will come over to inspect the property, and may ask questions regarding property taxes, recent upgrades, repairs or improvements to the property. She may ask questions regarding the type of foundation, sewage, and insulation. And, she may ask you if there are any material defects in the home.
Armed with this knowledge, the broker will then go back to her office and search through the multiple listing service (MLS) for recently sold homes that are comparable in size and type to yours. She will then research at what price these homes were listed, sold, and how long they took to sell.
After she has finished her CMA, the broker may ask to come back and present the information to you. It’s a good idea to have all the brokers you interview present their CMAs. It’s their best selling tool and the one with which they’ll convince you to give their suggested listing price and marketing strategy a try.
One problem sellers usually have is that deep down, they believe their house is worth a certain amount, despite current market conditions. If you’ve picked your three brokers well, each suggested listing price will be different: One will come in on the low side, suggesting a quick sale; one will come in at about the price you’d like to get for your home; and, the third will suggest you shoot for the moon.
Which broker’s advice should you take? If you think every broker missed the mark, don’t hesitate to get a fourth opinion. Otherwise, go with the broker whose suggested listing price and marketing strategy make you feel most comfortable.
Published: Jan 2, 2005