What’s my Home Worth?
Comparative Market Analysis
The first step to selling your Los Altos and Palo Alto area home is get a skilled local Real Estate professional such as the Arjani Group to provide you with a CMA or Comparative Market Analysis. This is an assessment prepared by a Realtor® of a home’s market value at a specific point in time. Typically, a Realtor® provides a CMA for a seller when the home seller wishes to find out what their home is worth in order to list their home for sale. The price of the home is established by comparing the property to similar properties that have sold within the past six months. In addition to neighborhood home sales, expired, cancelled and withdrawn listings are sales failures which show the price ceiling of the neighborhood.
A thorough knowledge of your neighborhood, along with an understanding of what drives the home sales prices in that specific area is part of the “art” of preparing a Comparative Market Analysis (CMA). Have you ever wondered why most of the internet sites that provide an “instant home valuation” such as Zillow or Trulia are typically off by 20% to 40%? The simple reason is that a computer analysis of home values can only take into account tax data, a trailing indicator. In a declining market, a trailing indicator will always price a home too high. In an appreciating market a trailing indicator will always put a home’s price too low. Why? These types of reports depend upon tax records. When a home is sold, the sale does not work its way into the tax data for as long as nine months after the sale.
The real knowledge and understanding within a CMA is primarily due to experience and expertise of a local real estate professional. Internet valuations are typically “quantitative” only. They take into account only numbers. The value of a Arjani Group Realtor is that their analysis is both quantitative using much fresher sales data than tax data, but more importantly it is primarily qualitative.
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Qualitative charactistics of your home would include some of the following:
The general desirability of the street upon which the home is located
School Scores
Prestige of the community in which your home is located
Whether or not your home is within walking distance of a desirable downtown area
Whether or not your home is near high tension power lines
Freeway, traffic or train noise; Location on a busy street (or not)
Orientation of our home on the lot and its orientation to the path of the sun
Feng Shui and Vastu attributes
Desirability of the home’s overall floor plan
Overall style and attractiveness and amenities of the interior including recent renovations and whether those renovations were propertly permitted
Shady, Sunny, Sloping, or flat area of the lot, and square footage of the lot
Size and usability of the backyard,
Landscaping….or lack thereof
Width of a lot on a street (wider lots are more desirable)
Views: Gorgeous or unattractive, or somewhere in between
Attractiveness and major renovations of other homes on the same street
The overall combination of qualities that a home possesses that make it desirable to buyers
Realtors® frequently use the word “comps” which is short for comparisons. These are the homes that are most like your home in terms of property condition, location, and desirability, which have SOLD recently, not just been listed. Property condition includes but is not limited to the age of your home, how well your home is maintained, how recently it was either remodeled or updated, and whether renovations were undertaken with proper permits. Location is the single most important factor in determining the value of your home. Lot size is the next most important driver of a home’s value due to the MFA (Maximum Floor Area ratios) that have been adopted by most Los Altos and Palo Alto area cities. Square Footage of the home is the third most important feature. Property condition(renovations and amenities) is the easiest thing to change. For this reason, homes in Los Altos and Palo Alto area will continue to increase in value and will do so for the foreseeable future. There is no buildable land in the area, and land prices drive real estate prices. Every home has a different set of attributes, and is a custom product. Your home is not a commodity product such as a car, where value can be established quite easily over the internet. A skilled Real Estate Professional is essential in helping you get the maximum value for your home.