A market analysis is a term used to describe an estimate of your homes value based on nearby homes that have sold and are similar to yours. They are often refered to as CMA’s which is slang for the same thing; Comparative Market Analysis. It is not quite as simple as finding a couple of homes like yours and saying that’s what your home is worth. There are some criteria we should always pay attention to and some we should ignore.
An analysis can be done for commercial property or land as well as homes.
Realtors are as often as not, given no instruction or training on how to complete a home analysis. A rookie Realtor is not going to be the best choice for you. If you are a home owner thinking of selling soon, an analysis is going to have some variability in it depending on who does it. Local Realtors have inside knowledge that can help with accuracy. Now the market is recovering nicely Realtors have more sales to choose from to try to find similar homes. Always expect some differences in amounts and do a little of your own due diligence when considering the numbers provided.
A Home Price Analysis Versus Appraisal
Whether you are considering selling your home or just interested in learning the value it is important to now that a home estimate is not a home appraisal. Nor is a home appraisal the definitive amount a home should or would sell for. So what’s the difference?
A home analysis is completed to try to establish a range of home sale prices to enable you to decide what price you want to sell for and that it is a reasonable expectation. A home appraisal is carried out to establish the cost to rebuild a home and to ensure any lending is within safe paramaters. Neither will tell you what your home is worth. Both will give you a good idea. So who tells you the value of your home? The buyer.
Market Analysis Rules
Home owners are actually pretty good at estimating what their home is worth. Realtors usually are very much on target. It’s not a difficult process. Here are what we should look for when carrying out a market analysis on any property, Barrington or other local areas, the rules are the same.
- Similar age of home, perhaps 10 years up or down.
- Similar square footage, no more than 20% variability.
- Location, within 1 mile of subject, farther requires some qualification. 5 miles for rural.
- Same neighborhoods are ideal to use.
- Lot size should be similar but do not need to be exactly the same.
- Same or similar construction materials. Only an appriaser can truly ajust for quality of construction.
- Interior finishes of similar age. Renovations will increase value.
- School district can have a huge affect on values.
An analysis should never be completed without seeing a property. Online versions of home estimates are fine for getting a rough idea but the variability of data they use is wide, the accuracy is poor.
Are you considering selling a home in Barrington? Would you like a FREE market analysis, prepared by a Realtor, not a computer?
Give us a call at 847-382-9100 or 847-363-3686.