YOUR EBOOK TITLE THE NEW CMA: COMPETITIVE NOT COMPARATIVE
Value based on historical trends is not market value. Market value is made up of two parts: the value we’re talking about in this step and the value that comes from a buyer’s perception of the worth of the home compared to competition. Basically, what others are willing to pay for it. When it comes down to the end of this whole process we want to have a competitive value that either matches, beats, is within a close enough range of the historical value or demonstrated value that makes buyers want to put in offers. So what that means for us is we can’t start necessarily with just pure market value, we have to start with demonstrated value and then discover from that small range where a competitive value would fit. STEP 2.1: Find Comparable Recently Sold Properties & Market Value Trendline STEP 2.2: Establish Pricing & Competitive Ranges LOREM IPSUM STEP 2: ESTABLISH VALUE BASED ON HISTORICAL TRENDS The historical value is made up of five main factors: Location, Price, Size, Condition , and Special Features and Amenities . Now there are other market factors that are still missing here such as Timing, Desirability and Momentum as well as other economic factors like interest rates etc. However, the reason those are not shown here is because those get into the competitive standpoint. The goal here is to look at these main five factors with a comparative mindset to give us a starting point in a good range to then add in those market factors while looking at the competition in our price range. We do this by using the Scattergram. The Scattergram is a very simple way to look at price versus size in a certain area while also factoring in special features and amenities. We find a trendline that we can use a good basis to then adjust up or down for our pricing range, which will eventually lead us to finding a competitive range. Let’s do this by using our house and the information we found on our MLS search. Create a Scattergram showing recent sales and the Market Value Trendline.
Property Price vs. Finished Square Feet (FSF); From 8/10/22 to 3/31/23 Scattergram Pricing For: English Ranch (Fort Collins)
Properties Closed
Fair Market Value
$770,000
$720,000
$670,000
$620,000
$570,000
1,500
2,000
2,500
3,000
3,500
4,000
Finished Square Feet
28
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