What Is a Comparative Market Analysis, Anyway?
If you’re a real estate “junkie” like me and spend free time trolling the web looking at various real estate websites, then you’ll undoubtedly have come across a lot of “instant” comparative market analysis offers. Just by entering a condo’s or townhouse’s address, the number of bedrooms, and other details like the approximate size of your property or number of bathrooms, and PRESTO! You get a value given back to you! It almost sounds too good to be true, doesn’t it?
Are comparative market analyses accurate portrayals of your condo’s value?
Well, the short answer is that these services are a merely a starting point. The systems use the same data that a professional appraiser or Realtor would use, as the programs review the recent sales of “similar” properties nearby. This is an important part of any evaluation, but it is far from being comprehensive. There are several things missing from a comparative market analysis like this.
First, an analysis of current competition on the market (i.e. current properties that are comparable to your home) is missing. If a neighbour with a similar condo to yours has their property for sale on MLS® at 10% lower than recent comparable sales, and they are having a hard time selling, it’s quite likely that your property isn’t worth the selling prices recently paid.
Second, these automated systems don’t take any upgrades into account accurately. If you completely renovate your home from top to bottom with new flooring, a new kitchen, and new bathroom, there’s a good chance that it’s worth much more than another home in your building with the same floor plan that doesn’t have any upgrades. Determining the value of those upgrades can only be done first-hand by an experienced appraiser or Realtor who knows the market inside and out.
Last, but not least, these automated CMA’s don’t take any external factors into account. It’s possible that the units the system is using to compare your condo with are on a lower floor than your home or that your home sits just above the tree-tops and you can see the Olympic mountains and ocean, whereas your neighbours can’t. Or perhaps your condo is located right above the main entrance or the garbage and recycling area, which are loud, and the most recent sales don’t compare at all.
There are several other factors that affect the accuracy of a comparative market analysis or evaluation, but you probably get the point by now. If you’re thinking of selling and want the most money you can possibly get, you need an expert evaluation. Who qualifies as an expert? Malcolm Gladwell, author of the New York Times bestseller Outliers, studied the greatest achievers in the world in several different areas. His conclusion was that mastery came after diligent practice amounting to 10,000 hours or more.
There are lots of different types of Real Estate to purchase, but none more complicated than strata real estate, like condos and townhouses. In turn, several of our colleagues in our industry steer clear of what we do because it’s out of their area of expertise. The average realtor in Victoria sells 1.4 condos per year. The question every condo or townhouse seller needs to consider is: does the Realtor® I’m working with have expertise in selling my type of property? If not, then you should be interviewing other Realtors®. It’s in your best interest.
We here at The Condo Group Real Estate, reimagined as Island Realm Real Estate are approaching a decade in condo/townhouse specialization in Victoria, BC. We’ve long surpassed the 10,000 hour rule and are masters in our field with well over 2,700 strata sales.
Come meet your Condo Experts, and visit our modern new office, designed to enrich your buying and selling experience, located at 102-3645 Tillicum Road, Victoria, BC.
If you are going to be buying or selling a condo, now or in the future, get in touch with The Condo Group Real Estate at 250-382-6636. In the meantime, search through thousands of listings in the Greater Victoria Area here.