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In virtually every area of the industry, Mega Realty conducts real estate market research and analysis and advises institutional and private investors, lenders, joint ventures, owners and developers. Our team helps customers meet their market and financial goals, from in-depth real estate research and project suggestions, to growth and exercise proposal reviews.
Chances are you know a thing or two about finding out the worth of a property if you have ever purchased or sold a house. The probability of the home being sold significantly decreases if the asking price is too high. On the other hand, you'll lose out on future sales if a home you are trying to sell is priced too low.
A real estate market research and analysis should always be done, before purchasing or selling, to ensure that a home is reasonably priced. In order to come up with an accurate market price, this study will compare prices of similar homes in the region. Let's start with describing what it is before we get into how to do an overview of the real estate market.
An analysis of the real estate market or a comparative market analysis (CMA) is a study of the actual property market values relative to yours and acts as a method to determine your own property's market value. This is different from an appraised value that can only be given by a licenced appraiser and thus has no legal or financial value. Be careful. Note that the market value that you calculate is arbitrary after doing a comparable market study.
Conducting an overview of the real estate market research and analysis sounds scary because there are so many variables that you need to take into account. However it is totally manageable if you take a structured approach and perform a few steps diligently. So how can a comparative study of the market be done?
For an investment property, a real estate market research and analysis study meets the same guidelines as for a residential property. Basically, data on properties similar to your property that are currently listed for sale or have recently been sold in your area will need to be collected.
Although there are many considerations to take into consideration when conducting an analysis of the real estate market, with a structured strategy it is fully manageable.
For you to decide what price to list when selling or a price to give when purchasing a house, your real estate agent can perform a CMA. Since no two properties are exactly the same, to account for variations, changes must be made.
If you are buying or selling a home, you should always do an examination of the real estate market research and analysis, I'll explain why. This report will help you understand the current housing market, how much your own property is worth, and how much you can charge for rent if it's an investment property.
The data obtained by an examination of the real estate market or CMA allows the seller to select a listing price and helps buyers to see if the price asked is too high, low or fair. To ensure that both buyers and sellers are getting a fair deal, based on the value of the land, a CMA should always be performed.
You would be able to put a price on a home accurately by comparing similar properties on the market.
The first step is to do an overview of the property in your real estate market research and analysis. It is important to test the following characteristics:
If necessary, search online for the original listing once you've completed the property review. This will give you a clear understanding of the home's overall state. For any upgrades, remodels or potential problems, go through the photos and descriptions. It should also list the builder or developer so that you can determine whether it was custom built or home cookie-cutter.
To send you the approximate market value of the property, use online tools like Zillow Zestimates. Since these are estimates of market value, they may not be totally reliable, especially if changes have been made to the house. But when you begin your real estate market research and analysis, this will have a decent starting number to go off from.
The next step is to look for properties comparable to yours. Comparable homes should have the same number of bedrooms and bathrooms, situated in the same area, within 300 square feet, identical lot size, home age and features.
You will be able to see exactly how much comparable homes were sold for in the region by looking up sold listings online. Within a radius of one to three miles from your house, look at past listings. Check for homes that have been sold in the last three months, and as market trends fluctuate, this will give you the most reliable value. Then, extend the search to the last six months if necessary. Choose from three to five comparable properties and add them to your comp list.
Next, search for existing listings within a one to three mile radius of comparable properties. At the very least, pick three homes that are comparable to yours. Bear in mind that these prices for listings are not always valid values. Usually, by selling higher, a market for sellers seeks to inflate values, while a market for buyers tries to deflate values with lower prices. Real estate developments are impacting the value of unsold properties. A fair idea of what your competition is like will be offered you by current listings.
Pending listings have not yet been completely closed, so looking at these listings will give you insight into how the market is doing in real time.
Expired listings of identical homes are the last thing you'll want to look at. This is highly useful data for your industry.
Assessment because assets that have expired have typically been priced too high.
It's time to decide a price range for your house, now that you have compiled a list of all the required details.
Choose one property that's certainly worth more than yours from the three to five comps you found. The property could be on a better street, offering more or newer features. Your ceiling value, or at the top of your price range, will be this amount.
Then choose an estate that is certainly worth less than yours. It could be on a busy street, with less characteristics or less attractive curb appeal. Your floor price or the bottom of your price range will be this number.
There is no better way to accurately price a home than to if possible, evaluate it in person. Take note of variables that will influence value when walking through the house, such as: general condition, any improvements or enhancements, facilities, features, required upgrades or repairs, as well as the exterior and landscaping.
You should have a price estimate for what your property is worth, based on all your study. Take into account all that you have learned when walking around the house and how the value will be affected. Then, take on your list the sale prices of the equivalent homes, divide the price by their square feet, and get the price for each home per square foot.Multiply that by the square footage of the home you are seeking to sell or purchase, until you have measured the average price per square foot of your comps.
Finally determine where your property falls within the price range defined. This number is your home's market value.
It can seem like a daunting challenge to find out how to do an examination of the real estate market research and analysis on your own. However with any real estate endeavour, you will be able to assess an accurate home price by following our step-by-step guide.
To ensure that you are not overpricing your house, perform a real estate market analysis if you are a seller. Overpricing results in outdated listings and a lack of consumer freshness. The longer on the market your home is the more money you're likely to lose. Alternatively, selling the property too low can result in future income being lost. To come up with the most precise market price for your house, use free online tools.