The way you can make sure the house your buying is priced correctly is to have your buyer's agent do a Comparative Market Analysis (CMA) for you.
When preparing a CMA for clients, we will show you the data of sold properties within the past, with a primary focus on what has recently sold in the same neighborhood (and most recently) whenever it's possible. You will also get a look at what homes are currently under contract along with others that are for sale.
Weight must be given to the most recent months and the trend. Detailed market analysis considers more than just those homes that have sold recently. Expired listings, pending listings, withdrawn listings and wider market trends are just as important.
Also important is how much you want the property.
Combining the practical numbers of your CMA with the market trends and your desire, should be a good
solid indicator as to whether you want to move forward with making an offer on a property.
A comparative market analysis is done for individual properties with similar characteristics and preferably in the same neighborhood.
It is based on comparable properties to the one you are interested in purchasing as well as a broader look at what all the homes in that specific neighborhood are selling for.
Once we dig down in to the numbers, you will have a better idea of what the home you are wanting to purchase is actually worth. From there, you will be able to figure out whether or not you want to go forward with an offer.
This information also provides you with a good idea on the nature of the sales in the neighborhood your home of choice is located.
If the homes tend to sell quickly, and this one has been on the market for a long time, we will take a look at the history of it.
It could be that it has been overpriced in the past and possibly reduced again and again. Or, it could be that there are plenty of reasons no one wants to buy it.
On the other hand, if the homes sell quickly and this one just came on the market, you better not hesitate on writing the offer or someone else will snatch it up right out from under you.
Ultimately, the bank will require hiring a professional appraiser which is typically done after you get your home of choice under contract and as part of the financing contingency.
Most people wait to get the appraisal until after the loan has started. This makes perfect sense as the appraisal will cost you a few hundred dollars.
Our CMA's are part of what we include within the buyer agency services that we provide to you.
Don't rely on an online market analyses to see what a home's value is, as many are extremely inaccurate. An in-depth look is needed, not a drive by or satellite survey.
As agents, we have access to all the information needed to compile a very helpful market analysis for you, once you find the home you want to buy.
We're here to help you determine a good price to start your bid on when getting ready to make an offer on the home.
We will also guide you when we think the seller is asking too much and that it's a good time to walk away from a deal.
Once you've decided that you do want to make an offer, we will be there to literally fill in the blanks on the contract, answer all your questions, and get you started on the process of truly buying a home of your own.