Comparative market analysis reports, often referred to as “comps” in the Malibu real estate industry, are a valuable resource for sellers. These reports contain information about active real estate listings, pending listings and homes sold within the past six months. Comparative market analysis reports also contain information about listings that were withdrawn, expired or canceled. A seller can use this information to determine a sale price that is in line with other home sales in the immediate area. Using comp reports properly can also reduce the amount of time it takes to sell a home.
Comparable Homes
Comp reports do not contain information about all of the Malibu homes for sale near a seller’s home. Instead, these reports contain information about comparable homes. These are homes that are approximately the same age and have the same upgrades and amenities. Comparable homes should also be in similar condition. Location is another consideration for sellers who want to use these reports to their advantage. If your home faces the side of another building, you cannot price it like one of the Malibu beach homes that offer stunning views. When pricing your home, it is important to look at the prices of these comparable homes to determine what buyers are willing to pay.
Once you receive your comparative market analysis report, you will work with your real estate agent to determine the best asking price for your home. Your agent will help you determine a price by reviewing all of the information in the CMA and determining which recent sales and active listings most closely match your home’s condition, amenities, upgrades and location. Looking at expired and canceled listings is another good way to determine an asking price. Some listings expire because they are priced too high and never generate any interest from buyers. You can look at these listings to determine which prices are too high for your area.
Improvements and Additions
If you are thinking about making improvements to your home to get it ready for sale, a comp report can also help determine which improvements to make and how to avoid increasing the value of your home beyond what other homes in the market are worth. If you make extensive improvements or add an expensive addition to your home, it could increase its value so much that you are priced out of the market.
Buyer Benefits
Comparative market analysis reports not only benefit sellers, they also benefit buyers. Without the information in a comp report, a buyer has no way to know what a property is really worth. The CMA can tell the buyer about recent sales of similar homes and help the buyer and his real estate agent determine how much to offer for a home.
Comparative market analysis reports can be as short as two pages or as long as 40 pages. Either way, they contain valuable information that sellers should not ignore. Without using CMA reports, sellers are at a distinct disadvantage in the luxury Malibu real estate market.
Russell Grether of Coldwell banker Previews International is a real estate agent based out of Malibu, CA. He specializes in Malibu real estate, Malibu homes for sale, Malibu properties, Malibu land for sale, Malibu rentals and surrounding area real estate from Montecito to the Pacific Palisades.
