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
    • 19 Jan 2018
      Extending from Randfontein in the west to Roodepoort in the east and including the towns of Krugersdorp and Magaliesburg, the West Rand has a plethora of property available to residents who choose to make this unique area their home.
    • 19 Jan 2018
      When it comes to financial planning, doing the work to ensure you’re prepared for unexpected emergencies is just as important as ticking off your other goals and New Year’s resolutions. The beginning of the year is also the perfect time to review your various insurance policies.
    • 19 Jan 2018
      No surprises at the first Monetary Policy Committee of 2018, as Reserve Bank Governor, Lesetja Kganyago, announced that the interest rates would stay at their current levels.
    • 18 Jan 2018
      The Southern Suburbs make up some of the most popular residential areas in Cape Town, comprising charming groups of suburbs which lie to the south-east of the slopes of Table Mountain. It is seen as the city's most expensive residential neighbourhoods with a choice of various private schools, upmarket eateries, wine estates, beautiful homes and trendy apartments.
    • 18 Jan 2018
      New year, new goals! If you’ve resolved to purchase your first property in 2018, then this 6-step guide from the Rawson Property Group is a must-read. It will help you navigate and simplify what is often be seen as a confusing process of buying your first home – right from the house-hunt to the house-warming.
    • 17 Jan 2018
      While the current property market may still favour buyers, it doesn’t mean that they shouldn’t be well prepared before putting in an offer to purchase.
    • 17 Jan 2018
      Lightstone lists Blair Atholl as the most expensive suburb with an average house price of R11.2 million, followed by Westcliff (R10.5 million), Dunkeld (R9.3 million), Sandhurst (R9.1 million) and Inanda (R7.2 million).
    • 17 Jan 2018
      As it currently stands, there are four main ways in which a home can be bought in South Africa, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, who adds that deciding in which legal entity to purchase the property is not a decision that should be entered into lightly, as each has its pros and cons.
        
    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