Rhode Island Real Estate: What is a Market Analysis?
Are you looking to buy or sell a house in Rhode Island? If so, then there are various factors to consider in determining the right price point. Location, square footage, number of bedrooms. And don't forget the comparative market analysis.
What is a comparative market analysis?
Created by your real estate agent, a comparative market analysis is a research document that examines different aspects of a home and compares them to similar homes in the same area that have sold recently. This information helps you and your real estate agent determine a fair market value for the home that you want to buy or sell.
How is a comparative market analysis created?
Obviously, to create a comparative market analysis, you need to compare the property in question with similar ones in the same area. An accurate market analysis will consider aspects such as the following:
When a property was sold: More recent sales will create a better picture of the current market. Even sales that are a few months old are not ideal.
The location of the property: It doesn't matter if a house is identical to yours, if it is not in the same area, then the property isn't actually comparable. The closer the comparables are to your property, the better the analysis.
Aspects of the property: The number of bedrooms, bathrooms, the existence of a garage, mudroom, bonus room, as well as the condition of the interior all need to be similar. The current state of the electrical and plumbing systems, plus the roof and foundation, all play a huge part in assessing the current market value.
A few last thoughts...
Although they use many of the same methods in determining the current market value of a home, a comparative market analysis is not the same thing as an appraisal. The appraisal can help buyers understand the condition of the home itself to assess how much they are willing to offer. A comparative market analysis helps buyers and sellers understand the current market value based on similar homes. If you are in the market for a home transaction, use your comparative market analysis to determine the best price, and make that sale both quickly and easily.