Humber/Ontario Real Estate Course 3 Exam Practice

How significant is a comparative market analysis in establishing a competitive listing price?

1. Determines the exact market value.

2. Is often established by analyzing homes sold on the same street.

3. Is a crucial component in establishing a saleable listing.

4. Increases the likelihood of the home being used for comparison purposes, helping sales of other homes.

5. Makes sure the home sells above asking price.

6. Relies solely on current market trends.

The correct answer is: Is a crucial component in establishing a saleable listing.

A comparative market analysis (CMA) is a vital tool in the real estate industry for establishing a competitive listing price for a property. Its significance lies in its ability to provide a thorough evaluation of similar properties in the same area—taking into consideration factors such as location, size, condition, and features. By analyzing these comparable properties, a CMA helps the real estate professional to gauge the current market conditions and competitive pricing strategies. The crucial component of the CMA process is that it provides a well-researched basis for setting a price that is both attractive to potential buyers and beneficial for the sellers. An appropriate listing price is essential for generating interest in the property and can significantly influence the time it takes to sell. It's not just about determining where the price should be set; it's about strategically placing a home in the market to motivate buyers and initiate offers. Thus, utilizing a CMA aids sellers in understanding how their property compares to others in the neighborhood, ensuring the home is competitively priced. This approach enhances the chances of a successful sale by aligning the property with current market demand, making C a strong justification of its importance in real estate transactions.