What is a Home Market Analysis?
A Home Market Analysis is an evaluation of similar, recently sold homes (called comparables or comps) that are near a home or homes that you want to buy or sell. Buyers, sellers, or real estate agents perform a report to establish and find a fair price range for the home the report is created for. The price range from the analysis can then be used as a guide to be used for establishing an offer price or a listing price. It is not an Appraisal.
Basically, performing the analysis involves finding the homes that are similar to the home under consideration, and creating an in-depth comparison of its size, age, location, and features of the home. It all comes down to one question: compared to other, comparable homes in this area, how much is this home worth? Answering that question involves looking at a fair amount of data on other homes in the current market.
The process for doing a home market analysis includes:
Defining criteria for selecting comparables in close range to the home
- Determine a list of quality comparables
- Evaluate the comparables within close range to the home
- Adjust comparable values for differences in size, condition, location, amenities, etc
- Estimate the ideal value of your target home based off the findings