Posted in: Selling a home

Selling? How to establish a price for your property

Pricing a home using CMA

Key Insights

  • Work with a real estate professional to determine the current market value of your home.
  • Understand that online offers or automated estimates might minimize your home’s worth or overlook features that buyers value when searching on the traditional market.
  • Overpricing your home typically leads to additional time and money spent on your end. Avoid this mistake by pricing your home accurately from the start.

While the 2023 housing market will likely continue to favor sellers, increased interest rates could reduce competition among buyers. Because selling prices and strategies change with the market, it’s important to work with a Realtor to price your home right the first time.

Your agent will work with you to determine your home’s listing price based on its true value today, which is marked by what a buyer in today’s market will pay for it. While important to you, keep in mind that what you originally paid for the home or how much is left on the mortgage are not relevant to buyers in today’s market.

How to determine the true value of your home

To determine the most accurate listing price for your property, Edina Realty Realtors will evaluate your home by:

  • Reviewing its tax-assessed value, keeping in mind that this is often a lagging indicator and not typically reflective of a property’s current value.
  • Comparing your home to recently sold, comparable and nearby properties.
  • Analyzing how your home’s features, upgrades or conditions may impact its value.

The unique evaluation process mentioned above is called a comparative market analysis, or CMA. The most comprehensive way to assess a home’s value, and therefore its best listing price, is through a CMA.

Request a free, no-obligation CMA today.

The difference between a CMA and an online estimate

To get the most accurate assessment of your property, steer clear of automated estimates. Instead, make sure an agent views and analyzes your property in person. Here’s why.

Online estimates pop up across real estate search sites, setting an early tone for buyers and sellers about what a home is worth. However, online estimates are produced via computer-generated models, and they often miss unique attributes and information about a home’s current condition.

For example, if you bought a three-bedroom home 10 years ago but have since added two bedrooms and egress windows to the previously unfinished basement, an online estimate may base the property value off other three-bedroom homes in the area. A Realtor assessing the home via a CMA and in-person analysis would know to price it higher due to the added bedrooms and buyer demand for homes with more finished living space.

Understanding online estimates and offers from iBuyers

In recent years, “iBuyers” have come into our local market. An iBuyer tends to be a large investment firm that offers automated offers to home sellers, who then bypass the traditional home sale process.

Since iBuyers operate via automated assessments that are generated through algorithms, it’s not surprising that they may not be able to take into account your home’s best features and upgrades. Similar to online estimates, sellers are at risk of not being compensated appropriately by an iBuyer. Even so, some sellers may find iBuyers advantageous if they:

  • Want to move without staging or updating their home.
  • Need to sell extra quickly.
  • Want to avoid the hassle of showings and open houses.

If you need more flexibility when selling, but also want the certainty of knowing that you are not leaving money on the table, look into Edina Realty’s partnership with QuickBuy.

Sellers looking for help with pre-sale home prep, minor updates or major renovations have even more options with Edina Realty Concierge, which offers a team of home design professionals ready to partner with you and handle everything. And you can capture the upside of the sale after improvements!

Why you shouldn’t price your home high, then lower it over time if it doesn’t sell

It can be tempting to over-price your home and hope to attract an offer, but today’s buyers are savvy, and they set up online search parameters based on typical home prices for the area. By pricing your home too high, you may:

  • Jeopardize website viewings to your listing.
  • Risk losing in-person showings where buyers could fall in love with your house.
  • End up with your home on the market for too long, causing buyers to be wary and wonder why such a great home isn’t selling.

In short, pricing your home too high is a mistake that can risk money or the opportunity for a fast closing. Avoid lost money and time by pricing your home accurately from the beginning.

Moving forward with a home sale

Setting a price for your property can feel like a daunting task without the help of a professional. Now is a great time to collaborate with a Realtor who can offer expert insights on your home and its condition.

If you’re ready to move forward with pricing your home for sale, reach out to Edina Realty or your agent to get a complimentary CMA with absolutely no strings attached.

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Status Definitions

For sale: Properties which are available for showings and purchase

Active contingent: Properties which are available for showing but are under contract with another buyer

Pending: Properties which are under contract with a buyer and are no longer available for showings

Sold: Properties on which the sale has closed.

Coming soon: Properties which will be on the market soon and are not available for showings.

Contingent and Pending statuses may not be available for all listings