Regardless of where you live, you have decided to make a move and sell your home. Your home is unique. There is no HOA, you have a creek, and you’ve done some significant upgrades. After interviewing several real estate agents, you are down to 2 finalists. Both have the same experience, work for successful brokerages, have the same marketing plan to sell your home, same commission rate, and both even wear the same sunglasses. How do you choose? There is one item that can differentiate which agent will fight for that extra inch and which agent will not. The answer can be found in the Comparable Marketing Analysis (CMA) which is presented to you by each agent.
Overall, there are 3 methods real estate agents use to value a home. Method #1 utilizes a computer-generated CMA, sometimes available through MLS systems and similar to what Zillow has branded as the ‘Zestimate.’ Method #2 chooses like comparable sales in the MLS system and the agent presents those with an ‘educated’ opinion on value. Method #3 is similar to Method #2 but the agent calculates feature adjustments between the subject property (your home) and the comparables. This method has similarities to an Appraiser’s Sales Comparison Approach because it captures upgrades and features which only a physical tour of the property can identify. Please note, a CMA is not an appraisal.
So which agent do you choose? Seriously give an edge to the agent who presents a ‘feature adjusted’ CMA even if the other agent’s opinion of value is higher. Method #3 is a time-consuming exercise for the agent, but also more accurate if you are selling, or even buying property which is upgraded or unique. Just as important, the agent can qualify and defend the price, even with an appraiser or another agent. Don’t get me wrong, computer-generated or opinions of value can be extremely accurate in neighborhoods with similar builder designs, lots, and HOA limits on additional external features, but if it is not, feature adjusted is the way to go. Lastly, if you like the idea of shooting high and you hook a non-cash buyer, there is a possibility your home may not appraise for the sales price, which could introduce new issues including contract termination and lost days on market.
-Guy Victor is a Founder and Operating Partner for Living Down South Realty