Comparative Market Analysis
July 30, 2007
This is the buzzword amongst buyers and sellers of real estate. Buyers love to buy at low prices and Ofcourse sellers wants just opposite. Here comes CMA, which could be helpful for folks to arrive at comfortable prices in valuing the property.
How to make Comparative Analysis?
Great question to answer. Here are few points that could be helpful to come up with acceptable conclusion for valuation.
Location plays key role in comparison on prices that has been quoting in the market. How far and how near a property is located to particular land mark viz., Railway station, Bus Terminal, School, so on and so forth. Place might be the same, but exact location might place crucial role in valuation of a property. Compare the prices that are available in the market that is near to (property available for buying and selling) key land marks. Get the average price and then place the offer to the concerned people for better transaction.
Recently Sold property
This is another way to come up with a fair price for a transaction. Folks must try to gather the prices of the recent transaction that happened in their locality.
City wise Comparisons
Lets’ say for ex; if you’re having a property in Tier-II or Tier-III cities, you could compare the prices with those cities. However it is questionable how those comparisons could be reasonable or rational to do a transaction. It could certainly add value for comparisons but it’s really debatable to come up with those comparisons.
Square Foot Rate
This is another tool and Ofcourse this is acceptable for coming up with fair price for the property. Comparing prices per sq.ft could be helpful to come up for meaningful dialogue between parties involved in a transaction.
Does your target house have a pool? A great view? An extra, or “bonus,” room, such as an in-law or guest suite over the garage?
The number of rooms, the total square footage of the house, the size of the garage, and the size of the lot all make a difference in finding good comparisons.