MARKET ANALYSIS

Comparative Market Analysis

A Comparative Market Analysis (CMA) is a tool used by real estate agents to value a home. It evaluates similar homes that have recently sold in the same area. Agents find comparable sales and use them to conduct a sales comparison. In most cases, an agent will find three homes that have recently sold and are as similar to and located as close to the home being valued as possible. Each one is then analyzed to pinpoint differences between it and the home being valued. Once these differences are priced out, the price of each comp is adjusted to see what it would cost if it was identical to the home being valued were it to be sold in the current market.

APPRAISALS

Based on a Professional’s Opinion

An appraisal is an unbiased valuation of a home based on a professional’s opinion. They are usually what mortgage companies use for home purchases and refinances. A lender usually orders a home appraisal and the cost of the appraisal, sometimes up to $500, is paid by the homeowner. An appraiser does a complete visual inspection of the interior and exterior of the home as well as taking into consideration recent sales of similar properties and market trends. The appraiser then compiles a detailed report on the home, including an exterior building sketch, a street map showing the home and any comparable sales, photos of the home and street, an explanation of how the square footage was calculated, and any other relevant information.

REFINANCING

When refinancing, lenders calculate your loan amount based on your home’s current value, typically allowing you to borrow between 75% and 96.5% of its worth. Understanding your home’s value is key to determining your equity, and the more equity you have, the better loan terms you can secure.

HOME IMPROVEMENTS

Planning home improvements to boost your resale value? It’s important to avoid overpricing your home for the neighborhood. If your property is already at the higher end of the local market, excessive upgrades could make it harder to sell.

A home valuation helps you see how your property compares to others in your area, providing valuable insight to guide your renovation decisions and ensure your investments align with market expectations.

QUALIFYING FOR CREDIT

If you’re considering borrowing against your home, understanding its value is essential. Lenders use your property’s valuation to determine your equity, which directly impacts the credit you qualify for and the terms you receive. The more equity you have, the better your borrowing options.

PLANNING FOR THE FUTURE

Knowing your home’s value isn’t just helpful—it’s smart. It equips you to prepare for the future and handle unexpected situations, like needing extra funds or facing a quick relocation