We can tell you right now how much your home will sell for. We don’t even need to see your home, or know how many bedrooms it has, or how large it is. How can we do that? Stick around for the answer to this question.

How do we know how much your home will sell for without knowing anything about your home? It’s a trick answer, but it’s the truth. Your home will sell for…. Market value.

Now, how do we find out what market value is? That’s what the rest of this video is about. The Custom Market Analysis, or CMA.

What is a CMA, and how do we come up with our numbers? We look at other houses that have recently sold and adjust those houses for the differences to indicate where we think your home will sell. This can be a complex process, so we’ll try to break it down for you.

When we are asked to do a home valuation, we typically try to find 5-10 houses to compare your home to. We will look at homes that have sold within the past 6 months, and that are within usually a half-mile radius of your home. If we can’t find enough, we can go back a year and out to a 1 mile radius.

Once we have selected 5-10 houses, there are differences we need to adjust for. Most houses are not the same as other houses. There are two types of differences that we adjust for, objective differences and subjective differences.

Objective differences are things like number of bedrooms, number of bathrooms, size of the property, number of fireplaces, finished square footage, and any other features that are based on facts. While subjective differences are things that are based on opinion, such as how updated the kitchen is, what is the exterior landscape is like, what is the condition of the flooring, the baths, how old is the furnace or other mechanicals, how is the overall condition of the home, are there any things that need improvement?

Each of these differences can be accounted for in a price adjustment. An example of this might be that if the other house has 4 bedrooms and your home has 3 bedrooms, we would adjust price by $5000 to account for that difference. Or if the other house has an average condition kitchen, and your home has an updated kitchen with new cabinets and counters and appliances, maybe the difference is 15,000, or 25,000. How do we know that the difference in bedrooms is 5000, or the difference in the kitchen is worth 15,000 or 25,000? That’s where 20 years of experience comes in. These adjustments are based on how much more or less a buyer would pay for that specific feature.

Once we take these feature differences into account, we can figure out what your home would sell for. We’ll take each house, add and subtract the various differences, and that’ll come up with an adjusted value. Then we average all the houses together to get an overall adjusted value that indicates where we think your house would sell.

This market value is our indication of what a knowledgeable buyer would pay to purchase your home. What is a knowledgeable buyer? It’s a person that has seen several homes and is working with a good agent, and is approved for whatever type financing they wish to use. Because they have seen several homes, they can compare pricing of these homes. If they have only seen a handful of homes, they may not know pricing very well.

An example of this is that if an out-of-town buyer comes into town and looks at 3 houses, they wouldn’t know that your home is priced correctly. Conversely if they have looked at 20 houses, they would have a better idea of if your house is priced correctly.

In the next video we will talk about pricing and how it affects the sale of your home.