CMA or Comparative Market Analysis is one of the modern and latest techniques when it comes to the evaluation of property, albeit residential or commercial. The strategy is being widely used all over the world for a long time, and luckily in the recent days we have also seen it growing and emerging as one of the most useful tools in selling, buying and renting properties at the competitive prices or rates in terms of renting or lending them. Although in Pakistan it may seem as a daunting task, but with a little research and prior knowledge you can still do wonders on the canvas of real estate marketplace.
If you are looking for the ways to conduct the CMA on your property that you are planning to bring forward for sale you are at the right place. Our step by step guide will let you know all the pros and cons of marketing and specifically CMAing your property prior to selling it so you can get the best price and the most lucrative and profiting deal on your property.
Foreword
In today’s market it is quite a lot important to set a fair price of your property if you want to sell it. There are certain factors that contribute to this, and one of the main and most important one is the growing competition in the market. According to large property platforms thousands of new properties are listed every day and if you do not set a realistic price of your property the chances of getting a deal closed on time start getting shrunk.
Likewise, it is as important as conducting a CMA before selling your property and the reason is that if you set a high price as compared to the market the potential buyers are most likely to run away from your listing. While, if you set a lower price the chances of getting a fair deal and maximum profit reduce a lot.
Why should you do Comparative Market Analysis?
Whenever you are planning to sell your property it is very important to understand the market first because it will help you in a lot of ways. You should always compare the property price that you want to set with the similar properties in the locality to set the most appropriate price of the property. Accurately pricing your property prior to selling it enables both the seller and the buyer to get the best deal.
How to do Comparative Market Analysis?
There are certain principles and methodology that you have to follow before doing the comparative market analysis on your property. We have listed the features and the characteristics that you have to clearly mention and evaluate during the analysis.
Locality:
The first thing that matters is the locality, in which you have your property. This matters a lot and the buyer puts this on priority. Likewise, the proximity to the city centers and the utilities is also very important in this regard and must be considered before setting the price.
Area of the Property:
The next thing that matters and should be kept in mind while evaluation is the area of the property. You have to keenly look into the total area, covered area and any area that is left open to sky before selling as this trigger a different kind of response in the buyers.
No. of Beds and Baths:
Beds and baths are equally important and the buyer needs to know their quantity before making a purchase decision. They have to check how much of the accommodation they are getting and will it accommodate every resident that is to accompany them here. Therefore, this should always be kept in mind while evaluation and must be mentioned on the listing.
Terrace or Rooftop:
Properties with balconies, terraces and the roofs are more likely to be sold at greater prices because these amenities have their specific value out in the market. So if you have any if these features in your property give them a cutting edge.
No. of Floors:
Number of floors adds to the accommodation, and also the outlook of the houses that’s why they are to be given an importance during the whole decision process. One thing that has to be kept in mind is that the added floors may not double the price of the property, but somehow they do add 50-60% in terms of annual yield of the property.
Age of Construction:
Age of construction is also given a special attention by the buyers before making the purchase decision and newer constructions are also given a preference while doing the business. Similarly, the price depreciation also occurs on the properties and any property that is older than 20 years is not given that much of the value at the time of purchasing.
Local Amenities:
The next thing is the availability of the amenities in the locality that is given a special attention. The access to the main roads, clean drinking water, electricity and gas supply all these things are considered while setting a price.
Recent Development:
While conducting a Comparative Market Analysis don’t look on the older listings as they may be set according to different criteria at different time zones. The property value may differ time to time. For an example, if a new bus station, metro stop, or a wider road is being developed the value of the property is more likely to get higher. That is why this should also be kept in mind and the evaluation must be done attentively.
Determining the Correct or Right Price
After you have conducted all the research and the evaluation, you now need to compare your property with the similar ones that you have in your locality and also you have to attentively look up onto the property listing websites by using certain location filters to streamline the whole process. You need to find the properties that are like to yours on the list that pops up on the popular listing websites. The properties must be similar in terms of area, age, accommodation and number of floors that your property has.
After this you have to choose 5 very close in terms of infrastructure properties in the listing and set the ceiling value. The ceiling value is the highest price anyone has set in the neighborhood. After that you have to find the floor price which is the least value that anyone has set.
Find the mean market demand by adding all these five property values and divide it on 5. This must be your price that you should put in order to get the maximum leverage on your listing.
Conclusion
The whole ball of wax regarding overpricing and underpricing of the property has been solved in the preceding paragraphs. You can conduct the real estate Comparative Market Analysis more efficiently by following our complete step by step guide. Doing this will not only ensure the best deal but also attract many different clients to your property.
