The Comparative Market Analysis is one of the most valuable tools available to someone considering the sale of their property. This Analysis, along with a Cost Approach Analysis, can give the Seller the clear, objective, understanding the Seller needs to set the price so that the property can sell within the Seller's time constraints. Comparative Market Analyses come in a variety of appearances and forms. The real value of a Comparative Market Analysis is typically contingent upon the Real Estate Professional's knowledge and experience that prepares it. The best Comparative Market Analysis is an Appraisal. The REALTOR well schooled in Appraisal techniques, who also knows the market in which your property sits, is probably the best person to complete the Comparative Market Analysis. So finding a knowledgeable, experienced, professional REALTOR to prepare a good solid Comparative Market Analysis, is the most important thing you will do to get your house or lot sold for top dollar, within your time constraints.
Ownership of a property and objectivity as to the value of that property are mutually exclusive. Around 1990 I took a 300 level College Appraisal class at the University of Kentucky's Jefferson Community College. It was taught by one of Louisville, KY's most respected Appraisers. As part of this course, each student had to appraise a house, not using an Appraisal computer program (like it is done today), and doing the entire process with nothing more than a tape measure, a calculator and the knowledge we had gained from Phil Tamplin's incredibly intense and difficult class. The house he gave us to appraise had been his own. After every member of the class completed the project, our collective, informed opinion of the value of the Appraiser's house all fell within 5% of one another, and most were within an even smaller percentage of the same value. At that point, Phil Tamplin provided me with the most valuable lesson I have ever learned about Real Estate values. He explained that he had appraised his own house, and had had it on the market for a very long period of time, before he took his REALTORS advice and lowered the price to what it should have been, (both what it ended up selling for, and what all his students appraised it at). It hit me like a ton of bricks even before he stated the obvious. The owner, no matter how much they know about valuing property, and real estate appraisal, can not be objective about their own house. Mr. Tamplin humbly admitted that he could not overcome his feelings that his house was more valuable than it really was. He promised that he would never try to appraise his own property again. I think Phil Tamplin was one of the best teachers I ever had, and if he is still appraising property in Louisville, KY, you should seek him out for your appraisal needs.
We all fall prey to the tendency to think our house is more valuable than it really is. It is impossible to be objective about something as personal as your own house, or lot. Having a knowledgeable Realtor is important. Having a REALTOR who knows the market is very important. Ultimately, your REALTOR'S objectivity may be the most important part of your decision making process toward pricing your lot or house so that it will sell within your time constraints. Make sure that you hire a knowledgeable, experienced, local REALTOR, and pay attention to the Comparative Market Analysis as it is presented. It is highly likely that your REALTOR'S informed, objective opinion of the value of your house or lot is much closer to reality than the value you hope to obtain. Also remember, the smartest and most experienced Real Estate Appraisers won't even attempt to determine the value of his or her own property, so why should you?
~ By John Shelby (2003)