YOUR EBOOK TITLE THE NEW CMA: COMPETITIVE NOT COMPARATIVE
So for our example, the momentum favors sellers . So we are going to look at the competitive situation of pricing the home at base price first, then look at the top end of our pricing range . Let’s start with the base price of $750,000.
In this graph, we placed our example house with a red circle at the size of 3500 total square feet and the price of $750,000. From that circle you can see the red lines drawn to the edges of the graph divide everything into four quadrants. To the upper left, are properties that are less size for higher dollar amounts. These properties (assuming there are no major differences in condition, location, or inclusions) we have an advantage over because we provide more value in size for the dollar. In the lower right, are properties that we have a disadvantage to because they provide more space for the dollar. Again, this is assuming there are no major differences in condition, location or inclusions. The bottom left and top right quadrants are more of a neutral competitive relationship because they hold to the price and size relationship. All of that of course is just based on price and size, which is ignoring the major pricing factors of location, condition, special features and amenities. To factor those in we will take a look at the properties we are competing against. Buyers want value. They want to know they are getting what they are paying for and specifically they are not overpaying for. So let’s look through a buyer’s eyes and see how our property compares. First let’s start with a simple counting step. How many properties do we have an advantage over and how many are we disadvantaged to? Looking at the graph we see two homes for sale that are not under contract in the top left quadrant which we have advantage over and zero homes for sale not under contract in the lower right quadrant which we have a disadvantage to. The other two homes for sale currently are in the neutral areas of the top right and bottom left quadrants. That means we have a competitive advantage, i.e. the number of homes we have an advantage over minus the homes we have a disadvantage to is greater than zero.
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