select
|

How to make the best of a CMA

The Comparative Market Analysis (CMA) has been around for a long time and by now, most home sellers know that they should ask their agent for one before deciding on an asking price for their property.



But many still don’t really know how much information should actually be included in a CMA – or how to interpret it and use it to their advantage, says Jan Davel, MD of the RealNet estate agency group.

“A CMA should consist of at least three important components,” he says “starting with a list of similar properties that are currently for sale in the same area and surrounding suburbs, and their asking prices. This is crucial, especially in the current market when sellers have to price exactly right if they want to be competitive in attracting prospective buyers.

“Everyone is feeling the financial pinch at the moment and buyers are naturally going to compare listings and show more interest in lower priced properties than those they regard as expensive, especially if they appear similar. They cannot judge the condition of the home or see the great finishes the sellers may have put in unless they can be persuaded - on the basis of price - to view the property in the first place.”   

Secondly, Davel says, the CMA should list the properties recently sold in the area, and the actual selling prices obtained.

“It is very important for sellers to remember that just because a property is on the market for a certain amount does not mean that it is going to sell for that price.Buyers make lower offers on homes and sellers accept those lower amounts every day – although you probably won’t hear about it from your friends, neighbours or colleagues at work because no-one wants to admit they had to drop their price in order to sell.

“The latest FNB Property Barometer shows that more than 80% of sellers in the current market are in fact accepting offers that are about 10 or 12 % less than their asking prices in order to achieve a sale – and homeowners who don’t want their properties to spend too long on the market need to bear this in mind.”

Which is why, he says, the third set of information the CMA must show is the listing times – or time on market – for the properties recently sold in the area, as well as their initial asking prices and eventual selling prices. “Reviewing this information will give property sellers a clear indication of where buyers are currently drawing the line and starting to show price resistance.

“Significant resistance will be indicated by a long time between the initial listing and the property actually being sold – or perhaps being taken off the market without being sold.On the other hand, by using the homes with the shortest listing times and their actual selling prices as a guide, sellers and their agents should be able to set a market-related asking price that will ensure immediate buyer interest and a swift sale.”




  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 17 Nov 2017
      FWJK has announced the launch of its latest residential brand, the Lil’ Apple, which will be launched simultaneously in two developments in Cape Town and Umhlanga totaling 600 apartments. The Lil’ Apple is set to be a brand of FWJK’s New York style apartments which will be rolled out nationally.
    • 17 Nov 2017
      It’s been a tumultuous year on many fronts, with socio-political uncertainty setting the tone for much of South Africa’s economic activity yet despite this and seemingly counter-intuitively, the residential property market has held up well.
    • 17 Nov 2017
      The EAAB (the Estate Agency Affairs Board) recently claimed that around 50,000 illegal estate agents could currently be operating illegally.
    • 16 Nov 2017
      Penthouses are synonymous with New York – characterised by high-rise living that is decidedly luxurious and spacious. While exclusivity comes at a price, you can still create a “penthouse” look and feel in your existing apartment or even the upstairs bedroom of a double storey house with some clever design changes and styling touches.
    • 16 Nov 2017
      The area has long been popular with kite surfers and, with escalating property prices in Cape Town itself, is increasingly in demand with home owners who work in town, but are looking to invest in more affordable properties.
    • 16 Nov 2017
      Cape Town’s popularity as a world-class tourist destination has resulted in a spike in the number of homes available for holiday lets and fuelled investor demand for sectional title units with short term rental potential.
    • 15 Nov 2017
      Sappi, one of South Africa’s oldest global companies and a leading global supplier of sustainable woodfibre products, has moved its global and regional headquarters to a new site on the corner of Oxford and 14th Avenue in Rosebank.
    • 15 Nov 2017
      There’s an old saying in real estate that you should seek to make a profit when you buy, not only when you sell – and a large part of succeeding at that endeavour is buying a home in an area with desirable features that will enhance the resale value of your property.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK