TOM & CYNDEE
BROWNER - CRS,
ABR, GRIQUAD CITIES REAL ESTATE WITH RE/MAX
SERVING THE ENTIRE IOWA AND ILLINOIS QUAD CITIES ............................................................
DAVENPORT - BETTENDORF - ROCK ISLAND - MOLINE AND SURROUNDING COMMUNITIES
TOM & CYNDEE
BROWNER - CRS,
ABR, GRI
BROKER OWNERS OF RE/MAX BI-STATE - SERVING IOWA & ILLINOIS
1-563-388-0008 Office - 1-563-388-0083 Fax - 1-866-388-0083 Toll Free - 1-563-570-7629 Cell - 355-1616 Home
Have a question? The answer is just a call or e-mail away. Contact us at tom&cyndee@quadcitiesrealestate.com
We know you want to sell your home for the most money, in the shortest time and with with least inconvenience. If you want serious advertising and effort from your agent, call or contact us for a FREE MARKET ANALYSIS of your present home. We are both Certified Residential Specialist by the Residential Sales Council. No obligation, of course. Call us on our private line at 570-7629 at RE/MAX BI-STATE or Contact us at tom&cyndee@quadcitiesrealestate.com - LOOKING TO BUY? Check out the services an Accredited Buyers Representative can mean to you.
CMA - COMPREHENSIVE MARKET ANALYSIS VS APPRAISAL
Many home sellers get confused between a Comprehensive Market Analysis and an Appraisal. This is easy to understand because both have many common elements. Generally, a CMA is done by Realtors to establish the most likely selling price for a property. To do this they look at the most recent sales of identical properties to yours in your neighborhood. These sales must be within the last year and it is preferred if they have occurred within the last six months. There must be three or more sales. If there have not been three sales, the Realtor will look in the closest subdivision with similar homes to yours. If this also fails, then homes that are not identical to yours, but are as close as possible will be used.
The more is less, less is more rule is confusing to most homeowners. It is used to compare dis-similar homes in doing a CMA. If home one that sold had a fireplace and yours does not, that home was more, so your home lacking the feature will probably sell for less. The sale price of the home that sold will be decreased by about $1500 to $2000 depending on trim to bring it's selling price down to yours (More is Less). Let's say that home two that was used was identical to yours except that it had a one car garage attached and you have a two car garage attached. All other features are the same, age, condition, bathrooms, basement development, size, upgrades, mechanicals, etc... So home two is less of a buy, because it only had a one car garage. Your home should sell for more. The Realtor will add about $2500 to the price home two sold for; to raise it's value to a home with your features (Less is More). Another thing that can change value is the time of the sale. If home one and two all sole within the last month and home three sold ten months ago, a time variance to value must be added. In 1999, homes in Davenport went up an average of 13.3%. However, that was not all neighborhoods and all price ranges. To be accurate, the Realtor must figure out what the increase was for the subject home and neighborhood. Let's say it turns out to be 8%. If home three sold ten months ago, then the value must be adjusted up for the appreciation between then and now. That looks to be about 6% within the 10 months if the appreciation is calculated to be 8% for the year. By the way, those other factors mentioned and others must be considered in doing the CMA correctly. Let's say a fourth home was found, but it sold for more but was also a lot larger. It might be ignored if the other three properties are more similar, but the Realtor will still look at it. One way of making such a comparison is to take the selling price of all four homes and divide each by the square footage of that home. You might see home one sold for $85 a square foot, home two for $82.80, home three for $84.20 and home four the larger home for $83.70. As you can see, the difference is fairly close. The fourth home sold for more because it was two hundred square feet larger than the others. One one may have had newer roof, carpet, furnace or better drapes or something that made the buyer pay a small premium for it.
A Comprehensive Market Analysis is no guarantee of selling price. It just gives you the seller the most likely range your home will sell within. This could change instantly with the time of the year you put the home on the market, how much competition is in the market, the general outlook within the community, lay offs, holidays, elections, changes in interest rates and other factors. Sale Price is based on what a ready, willing and able buyer and a motivated seller negotiate. There are many factors that may affect the actual selling price.
So a CMA is informational for the Seller to place the asking price in the most likely range to generate the highest offer without chasing away able buyers. A CMA is an opinion based of the available evidence. It is as good as the experience, time and effort of the agent preparing it. Usually this service is free as part of the service provided when you list your home. If you intend to Fisbo your home, then expect to pay a fee for this service. It can run $50 to $!50 depending on the time spend and documentation demanded by you.
An Appraisal goes through the same pricing steps as a CMA. It is done by a professional who has taken classes and passed the State examination. They can also prepare a suggested value before listing or selling a home, the cost is usually around $250 to $300. However, many banks will not allow an appraisal done before a sale to be used for the buyer. They may still demand that the buyer purchase a separate appraisal to verify that the home is worth at least what they have offered. Because of this, most sellers do not purchase an appraisal before they sell their home, but rely on the CMA. The appraisal therefore, certifies to the bank and secondary mortgage investors that the buyer has paid fair market value for a home or less. That the home is not worth less than the amount offered by the buyer. If the buyer paid, less than fair market value, an appraisal will usually not show this fact.