YOUR EBOOK TITLE THE NEW CMA: COMPETITIVE NOT COMPARATIVE
Looking at a possible $770,000 price for our example home and doing the first basic comparison, we have two homes that are in the top left advantage quadrant (one is hidden behind the text box at the top in this example), one home in the bottom left neutral quadrant and one in the bottom right disadvantage quadrant. This gives us a net advantage. However, as we look at the details again, that renovated property being basically the same price really doesn’t show as an advantage. It’s more of a neutral property at this point, because yes we are lower priced and a larger home, but it has a larger lot and is renovated. So, let’s call that a pure tie.
That makes us now a net neutral position in the market.
Note: I could have chosen $775,000 which would have been a true halfway price point, but I chose to show $770,000 for a reason. With the updated home already at $775,000 with larger lot, we may force ourselves into a disadvantage to that property. Yes, it’s only $5,000 but in the updating long run, that can get new appliances and a few other details that could balance the scales in our favor. Which is why at $770,000 it is viewed as neutral, but at $775,000 I would view it as disadvantageous, which would put ourselves in a competitive negative situation, versus the neutral position we find ourselves in now. A neutral market is not the same as competitive advantage or disadvantage. It is teetering on the brink of both. So what determines which direction it goes? The market factors we found earlier that we have yet to use in our positioning, desirability and timing.
In our example the area, is highly desired and our timing is great which means we have a competitive advantage at $770,000.
43
Made with FlippingBook - PDF hosting