How do Realtors price a home for sale?

 Realtors use what is called a comparative market analysis (CMA) to determine the price of your home. The comparable home sales in your area will help the realtor come up with the “market value”. Comparable homes come from homes currently for sale, sold, pending sales, and withdrawn/expired.  

Next, Realtors try to compare apples to apples. They select comparable homes within a 3 mile radius, in the same zip code, and same schools. Homes selected must be similar in levels, square foot, lot size, number of bedrooms and bathrooms. They try to find homes that are as close to yours as possible.

Next, estimate the value add of your upgrades: Is it a Gourmet versus builder-grade kitchen appliances, custom built bathroom, hardwood flooring versus carpeting, backyard with a big deck and patio underneath? Two properties with the same square footage can have widely different price points depending on the materials used in the property.  Keep in mind you might not recoup all the money spent on upgrades. Condition and age is taken into consideration: Does the home have a new roof or new HVAC system? A well maintained home is likely to command a higher price. 

Finally, the current market condition is considered: Realtors check if there are lots or fewer of homes on the market? And how quickly the homes are selling. Your Realtor will analyze the data and help you assess what pricing strategy to use. Whether to use the price of homes currently for sale or homes sold for pricing. Including whether to price below or above market. Pricing a home is not always easy but a good and experienced realtor can prepare a CMA that will pinpoint an accurate list price and probable sale price.