What is a Property Profile and Market Analysis?
As a rule, when a Seller interviews a real estate agent to list their property that agent should be more than willing to prepare a written Comparative Market Analysis (CMA) free of charge.
Unfortunately, many agents in the Star Valley area do not do this. Many do not have the training or experience to complete a CMA. Other agents rather than prepare an in-depth report to establish the Fair Market Value will list any property at whatever price the Seller wants!
Personally, we believe that the CMA document is an extremely valuable tool! It does not matter what I think the property is worth. It does not matter what the Seller thinks the property is worth. What does matter is what the Maket Conditions say the property is worth!
When prepared properly, a CMA looks at information that can be qualified and quantified (square footage, number bedrooms, baths, age of the home, acreage, location, etc.) Typically, the CMA will look at like-kind properties that have sold recently, properties that are under contract and properties that are currently for sale.
As a rule before listing a property, our team inspects the property, then prepares a Property Profile and Market Analysis. The Property Profile provides the Seller with the properties for sale that your are competing against. The Market Analysis (CMA) is an in-depth look at what like kind properties have done in our market over the last year or more.
This famous saying attributed to the Great One, Wayne Gretzky: "Skate to where the puck is going, not to where it is" is part of our Property Profile and Market Analysis.
Perception alters reality, and this is a crucial consideration in understanding the buying and selling process. Normally, property value is determined by the emotional impact the property has on the buyer. These emotions are based on such things as location, curb appeal, decoration, paint colors, views, etc.
The real estate market (what’s hot - what’s not) is always in fluctuation! When we recommend pricing, we want to be not where the market was yesterday … but where it is going to be tomorrow!
While a Propery Profile and Market Analysis is clearly a Seller’s tool, it is also a buyer’s tool! When we represent a Buyer we will use it to help our clients eliminate homes that are overpriced or arrive at reasonable price for a property.
With few exceptions almost all real estate contracts today (even cash sales) are contingent upon an appraisal. Lenders require an appraisals if a new loan is required. Many buyers today require one on cash sales or if the property owner is going to provide financing.
If the property does not appraise for the full price, the buyer will not get his/her loan. When this happens, most real estate contracts allows the buyer to:
A - terminate the contract without further negotiations;
B - renegotiate with the seller tfor a lower sales price; or
C - renegotiate with the seller to pay cash for the difference between the amount of the loan and the sales price of the property.
As a Seller, you do not want to leave money on the table by underpricing. As a Buyer, you do not want to pay more than what the property is worth. A CMA helps both the Seller and the Buyer identify the Fair Market Value of a property.
