CMA, or Comparative Market Analysis, is one of the most sophisticated and up-to-date tools for valuing property, whether residential or commercial. For a long time, the approach has been widely employed throughout the world, and we have recently seen it expand and emerge as one of the most effective instruments for selling, purchasing, and renting properties at competitive costs or rates in terms of renting or lending them. Although it may appear to be a difficult undertaking in Pakistan, with a little research and prior knowledge, you may still perform marvels on the real estate market.
You’ve come to the correct site if you’re seeking for information on how to do a CMA on a property you’re considering to sell. Our step-by-step tutorial will walk you through all of the benefits and drawbacks of marketing and, in particular, CMAing your property before selling it, so you can achieve the greatest price and most lucrative and profitable deal possible.
Foreword
In today’s market, setting a reasonable price for your property is critical if you want to sell it. There are several variables that contribute to this, the most important of which is the increasing market competitiveness. Thousands of new properties are listed every day on huge property platforms, and if you do not establish a realistic price for your house, your prospects of closing a deal on time start to dwindle.
Similarly, it is just as necessary to conduct a CMA before selling your home, because if you set a high price compared to the market, potential buyers will most likely avoid your listing. When you establish a lower price, your chances of receiving a fair deal and making the most profit drop dramatically.
What are the benefits of conducting a comparative market analysis?
When intending to sell your home, it is critical to first understand the market because it will benefit you in numerous ways. Always check the property price you wish to set with the prices of similar homes in the area to get the most appropriate pricing. Prior to selling your home, accurately pricing it allows both the seller and the buyer to get the greatest offer.
What is Comparative Market Analysis (CMA)?
Before doing a comparative market analysis on your property, you must adhere to specific concepts and methodologies. The features and traits that you must properly mention and analyse during the analysis are listed below.
Locality:
The first consideration is the area in which your property is located. This is really important, and the buyer prioritises it. Similarly, accessibility to city centres and utilities is critical in this regard and must be taken into account when determining the price.
Property Dimensions:
The area of the property is the second consideration that should be made during the evaluation. Before selling, you should carefully examine the overall area, covered space, and any exposed areas to the sky, since this will elicit a distinct response from buyers.
Number of beds and bathrooms:
Beds and baths are equally crucial, and the buyer must know how many of each are available before making a purchase. They must determine how much lodging they will receive and whether it will accommodate all residents who will accompany them here. As a result, this must be remembered at all times when evaluating and noted on the list.
Rooftop or Terrace:
Balconies, terraces, and roofs are more likely to sell for higher prices since these features have a market value. If you have any of these features in your home, make them stand out.
Floor Count:
The number of floors adds to the accommodation as well as the appearance of the houses, which is why they should be considered during the entire decision-making process. One thing to keep in mind is that while the additional floors may not double the property’s price, they do add 50-60% to the annual return.
Construction Date:
Before making a purchase decision, purchasers pay close attention to the age of the construction, and newer constructions are given advantage when doing business. Similarly, property values depreciate over time, and any property older than 20 years is not assigned the same amount of value at the time of purchase.
Local Attractions:
The second consideration is the availability of amenities in the area, which is given special consideration. When determining a pricing, access to main roads, safe drinking water, power, and gas supply are all taken into account.
New Developments:
When performing a Comparative Market Analysis, avoid looking at older listings because they may have been created using different criteria in different time zones. Property values may fluctuate over time. For example, if a new bus station, metro station, or larger road is being built, the property’s value is more likely to rise. As a result, this must also be considered, and the evaluation must be carried out with care.
Choosing the Correct or Correct Price
After you’ve completed all of your research and evaluation, you’ll need to compare your house to similar properties in your neighbourhood, as well as carefully search property listing websites using various location filters to speed the process. You should look for properties that are similar to yours on the popular listing websites’ lists. The properties must be comparable in terms of size, age, kind of lodging, and number of storeys.
After that, choose 5 properties in the listing that are quite similar in terms of infrastructure and establish the ceiling value. The ceiling price is the highest that anyone in the neighbourhood has set. Then you must determine the floor price, which is the lowest value specified by anyone.
Add all five property prices together and divide by five to get the mean market demand. This is the price you should set in order to obtain the most value out of your ad.
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