Want to know what your home is worth? You NEED to know what your home is worth.
So, there’s this meme going around reminding us all that 2022 is pronounced “2020, too.” It’s supposed to be some kind of cautionary tale, maybe. But we’re just not buying it.
Just as we did at the start of 2021, we’re choosing to hold on to goodness and hope. In fact, we’ve basically got a strangle-hold on optimism these days. And we’d like to share some with you via a little thing called a Comparative Market Analysis (CMA).
If you already know what a CMA is and if you already know you want one—either a super-personalized version based on a walk-through with Heather or a simpler, automated one—skip to the bottom of this post and let us know.
What’s a Comparative Market Analysis?
A Comparative Market Analysis (CMA) is a side-by-side comparison of homes for sale and homes recently sold in your same neighborhood and price range. CMAs compare home type, number of bedrooms, number of baths, lot size, neighborhood, property condition and features, and many other factors.
With all that useful data in hand, we can determine your home’s estimated market value based on how buyers and sellers have approached past sales, pending sales, and homes recently put on the market.
Why You Should Care About Your CMA?
Even if you have no intention of selling your home any time soon (or ever), it’s a good idea to know how much it’s worth.
Much like your banker provides you with financial statements and your wealth manager tells you the value of your investments, you should expect your real estate agent to offer you a CMA every year. Why? Your home’s value is a huuuuuuuuuge part of your net worth!
Don’t Rely on Zillow
If you’ve plugged your address into an online tool like Zillow, Trulia, or Redfin “just to see,” you’ve likely been pleasantly surprised by a number that’s higher than you expected. Please don’t take that cha-ching at face-value. By Zillow’s own admission, their Zestimates can be off by as much as 40%. And the other sites aren’t any better.
It’s not that these companies are being intentionally misleading. It’s just that their data is incomplete and outdated. Plus, the algorithms their estimates are based on can't make adjustments to reflect if a home has been updated, how well it's maintained, or esoteric values such as curb appeal and views.
The bottom line: Online valuation tools give an idea of what homes could be worth, not what they are worth.
CMAs v. Appraisals
It’s important to note a CMA is not an appraisal. Although a CMA is used to help determine current market value, it does not establish the actual value of a home. That’s done through a bank appraisal, which is a professional determination of a home’s value.
Appraisals always happen when homeowners refinance their mortgage and usually happen when someone’s buying a home (unless the buyer is paying cash and doesn’t need a loan). They’re completed by licensed appraisers, using guidelines established by the Federal Housing Finance Agency, which regulates federal housing loan guarantors such as FHA, VA, and housing loan purchasers Fannie Mae and Freddie Mac.
Appraisers use the same data as real estate agents to find comparable homes in their market research, plus additional guidelines to minimize a bank’s risk. They’ll consider—and can adjust values to reflect—the speed of the market and whether prices are rising or falling.
Experienced real estate agents prepare CMAs tuned to lending standards. That way, sellers and buyers better understand both what the market is doing and how much lenders are willing to finance.
In short, you can trust that a CMA we create for you is a reasonable estimate of what someone may be willing to pay for your home at any given time.
We’ve given your CMA options an upgrade
If you’re already a friend, client, or already on our mailing list, usually, we just assume you’re interested in a CMA, so we put one in the mail to you. This year, we’re going about it a little differently—mostly so we can continue with our intention of developing more and more sustainable business practices.
You have three options:
Opt-out of your CMA. This isn’t a forever decision, of course. You can contact us anytime and we’ll happily put one together for you. To choose this option, do nothing. (Easy peasy!)
*Get a super-personalized CMA. Heather would love to put her eyeballs on your place so she can give you the most accurate estimate. To choose this option, add yourself to Heather’s calendar and she’ll pop by for a walk-through. *Our recommended option!
Get a simpler, auto-generated CMA. If you’re curious about your home’s worth, but not so curious that you’re interested in putting on real pants so Heather can stop by, we can generate a slightly less accurate (but still helpful) report for you. To choose this option, fill out the form below!
Ooooooh, That’s Interesting
Chances are super good that your home is worth more than you paid for it… even if you only recently purchased it. That means seeing your CMA may start your “What if…” wheels turning.
If so, Book a Discovery Meeting so we can answer your questions or help you think through a possible move!
Otherwise, if you know someone looking for help buying or selling a home, please feel welcome to connect them with us. People need an ally they can trust to guide them through the real estate process, and when you refer someone to Dwell Denver, they’ll get straight-forward, no BS help that always ends with calm, confident decision-making.
Nearly 99% of our business comes from referrals—and we’d be so honored to take good care of anyone you send our way.