As an important component of the home buying or selling process, a Realtor usually creates a comprehensive market analysis or CMA to provide their client(s). Conversely, when a borrower applies for a home loan, the lender will engage an AMC (Appraisal Management Company) so they in turn can assign the appraisal request to one of their approved licensed real estate appraisers. The real estate appraiser then creates an appraisal report to provide the lender as the client.
While neither report is an exact science, both the CMA and an appraisal report help to estimate a property’s current market worth. Having said that, the differences between the two could not be farther apart and the level of analysis and detail does not even begin to compare.
If you’re considering selling your home, especially in an area where values are on their way up, you may be tempted to first list your property at a higher than market value price just to see if you could get it. What do I recommend? Don’t do it.
“Knowledge is the Key to Success – Timing is the Key to Profits!”
Most experienced Realtors will tell you pricing your property correctly from the beginning is crucial to getting it sold quickly and at the best possible price. Historical data shows that overpricing your home and then dropping to a lower price when the property fails to sell usually only leads to selling it at a much lower price than what you originally anticipated.
Research also shows that the longer a property stays on the market, the greater the discount is likely to be off your original asking price. Buyers and investors alike will pay close attention to “DOM” (Days on Market) and “CDOM” (Combined Days on Market), both are indicators of the appeal of the property at its current price.