When you are selling your home or multi-unit property in Silicon Valley, the single-most important thing you’ll have to decide is your asking price. That’s where the comparative market analysis, or CMA, comes in.
A CMA is simply an estimate of your home or property’s current market value based on other, recently sold properties, ideally in the same neighborhood, that are similar to yours in size and features (these are often called comps). Knowing your home or property’s value can help you determine a solid listing price.
This is particularly important with multifamily properties, such as duplexes, triplexes and fourplexes. These properties are highly specialized, and their prices can vary dramatically from one market to the next.
What Happens if You List Your Duplex, Triplex or Fourplex at the Wrong Price?
If you price your home or property too high, it will sit on the market without selling and you may end up getting less money in the long run; if you price it too low, you are leaving money on the table. Neither of these is a good option. There is a happy medium that allows you sell your house or property according to the one truth in real estate: A home or property is worth exactly what someone is willing to pay for it in the current market. Obtaining that CMA gets you in the ballpark and lets you know what other properties like yours have sold for in the recent past.
What’s the Difference Between a CMA and an Appraisal?
A CMA is different from a home or property appraisal. In an appraisal, a bank arranges for a state-certified or state-licensed appraiser to visit your home or property and report observations and facts about the property to determine fair market value, as of the date of the appraisal. This formal appraisal ensures that the bank is not lending your potential buyers more money than the property is worth. Appraisals are usually done by banks for lending purposes and cost money. CMAs are done by real estate agents working in the market and are free. A comparative market analysis is a great way to guide you in determining your asking or list price.
A Word on Appraisals
Appraisals are bank processes. After a buyer applies for a loan to purchase your property, the buyer’s lender will send out a professional to ensure that the property is worth what the buyer wants to borrow. The appraiser, who is a state-certified or state-licensed professional, will look at all the property’s features and determine what it’s worth.
But why do lenders need to send out appraisers? They do so because lenders are in the business of making money. They don’t want to let someone borrow more money than a property is worth, because then the lender runs the risk of losing its investment; a buyer could walk away from the home and default on payments.
Ready to Sell a Home or Multi-Unit in Silicon Valley?
Selling a home, duplex, triplex or fourplex does not have to be overwhelming, Debbie Marino is here to help. If you live anywhere in Silicon Valley, click here to set an appointment, call or text Debbie at 408-210-2400, or send an email to Debbie@PropertiesInSiliconValley.com to request a free, no-obligation consultation.
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