One of the most burning questions out there for estate agents is – How much is my house worth?
As simple as the question sounds, the answer certainly is not. A house’s worth in the market keeps altering constantly and assigning a definite value to it is a result of a rigorous procedure. A Comparative Market Analysis (CMA) evaluates a home against others that are situated, sized, and equipped similarly. A CMA should ideally utilise recently sold properties from the same subdivision. It has a similar function as that of an appraisal, but the main distinction is that an appraisal determines a home’s value, whereas a CMA determines its price – price is what you pay, whereas value is what the house is worth.
The difference between a CMA and an appraisal may seem like a perplexing concept at first, but you need to keep in mind how the price you get for a property in the market doesn’t always depend on its quality, but on what people are willing to pay for it. Hence, a comparison report is one of the most useful tools when it comes to setting realistic expectations before buying, selling, or leasing a property.
Finding A Property’s Worth Using a Comparison Report
Comparison reports are used for a multitude of purposes such as finding the sale price of a property, degree of leverage for a mortgage, locality inspection and more. Here is how you can obtain a comparison report and use it to value your property correctly.
Find an Estate Agent
A comparison report is no child’s play, you need to have an expert backing you for the right results. One of the first things you should do when trying to build a CMA is to get in touch with an estate agent. They can deploy their database and technical knowledge to give the report a definite structure and look for the things that matter.
It is best to go with an agent that has sizable experience in the industry since both their word and their work are more likely to be reliable.
Provide Details Of Your Neighbourhood
A comparison report isn’t just made to compare two properties by themselves, but to differentiate the living experience between the given properties and its implications on their market price. For instance, it ought to take into account the more desirable blocks, neighbourhood amenities, annoyances, and governmental regulations. The proximity of your house to schools, bus stops, airports, and the city centre also makes it more or less appealing to buyers irrespective of its size.
Thus, provide your broker with every relevant detail about your particular neighbourhood so that they can conduct a holistic analysis.
Describe Your Property
While creating a comparison report for your property, it goes without saying that you’d have to list out all its specifics. This includes details such as its square footage, in-built area, age, furnishing, etc.
Based on the description you provide, your estate agent will look for 3-5 similar properties – some in your area and others spread across the city of your choice to compare your property against. This will act as the backbone of your CMA report.
Assign Desired Parameters
You cannot draw comparisons between multiple things without setting parameters to judge them by. Your agent will help you understand the major factors people look for in a home and rate your property accordingly. Some of the most common parameters to consider are the number of bedrooms, length of ceilings, state of walls, green cover, and more.
Your property will be adjusted against the ones you’ve taken for reference against any special upsides or downsides it has. For example, if you plan on renting out your property but you live next door in a home with thin walls, it’s bound to bring down your score. A CMA report takes care of all such tiny details.
A CBRE report stated that they anticipate residential investment to set records almost every year of their forecast period due to its resilience and strong long-term fundamentals (to 2025). Thus, if you’re about to make a real estate transaction, there couldn’t have been a better time than right now. Getting a comparison report for your property can help you make the most out of this market boom and use your asset to its best capabilities. Once you know how much a property is worth, you can decide when’s the best time to buy, sell, or lease it – a decision that could save you thousands of pounds.