8 Big-time Buyer Mistakes #4

#4 Failing to have a Comparative Market Analysis (CMA) prepared before producing an offer

Before making an offer to purchase The One, you must have precise and accurate knowledge of what the real market value of that property is in order to ensure that you do not overpay. (Read that sentence again.) From an investment standpoint, your return on investment will be greatly reduced if you pay too much when purchasing.

Good real estate agents prepare exhaustive Comparative Market Analysis (CMAs) showing what similar properties have recently sold for, the difference between asking and selling prices in a neighborhood, the amount of real estate activity in an area and where it is trending, how long these properties have been on the market before they sold, what the current sellers paid for this particular parcel, what the tax assessorís opinion of value isÖ Starting to get the picture?

This is the same type of information sellers should be receiving when deciding on a listing agent, a marketing plan, and what the asking price should be when they list a property for sale. You should have access to at least the same level of information as the seller, shouldnít you?

Remember, the sellerís agent is working to maximize the sale price for their clients. Itís highly unlikely that the sellerís agent is going to work as hard for you as a buyer to purchase their listing at the lowest possible price. Not impossible, but highly unlikely.

Last Updated: November 11, 2007