CMA PREP Guide

Introduction

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Real estate agents rely on their reputation to ensure a thriving business.

It’s critical to demonstrate your expertise to potential clients. When

working with a seller, preparing a professional, comprehensive

Comparative Market Analysis (CMA) is a critical component of the listing

appointment. This guide is designed to help you stand out from the

competition and prepare a CMA which not only gets you the listing, but

sets up your seller for success.

Find Comparable Sales

The first step in preparing your CMA is finding the best comparable

property sales to use in the analysis. Using the same criteria as a

professional appraiser would use, start by looking for homes which sold in

the last 6 months or so within the same tract or subdivision, if possible.

Search for homes with similar characteristics, such as square footage, lot

size and number of bedrooms. If the subject home has any unique

features, such as a pool or view, comparable properties with these

attributes will be the best option as well.

Choose The Appropriate Comps

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Now that you have a selection of homes from which to choose, it’s time to

evaluate them for use in your CMA. Not every home you find need to be

used in the report; you want those which most closely resemble your

subject property in order to accurately predict the list price. Weed out

those which are clearly not appropriate, such as homes in poor condition

or location. Then evaluate the rest based on date of sale and features. The

goal is to use the most recent sales which most closely compare to the

subject home.

Make Adjustments

Before you generate your CMA report, you must adjust values based on

actual conditions and features of the home. Your CMA must account for

variances in size, location, upgrades and other features. A turnkey home

might sell for thousands above one of the same size which needs new

countertops and carpet. A pool or outdoor kitchen will also add to the

price tag, as will the location and view of the home.

If you’ve been working in your market for a long time, making these

adjustments might be second nature, but if you are new to CMAs, here are

a few ways to find the adjustment values you need.

• Ask your broker – Your broker or other experienced agent is a great

place to start; they are there to help guide you, don’t be afraid to ask for

help.

• Google it – There are some good online resources which can help you

determine approximate sales value for home features.

• Go to the pros – Ask a local appraiser for help if you know one or speak

to your preferred lender; both of these have experience justifying property

values.

Tips for Making Adjustments

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Now you’re ready to run the report. Using the automated system provided

by your MLS, add the subject and comparable properties and run the

report. Once completed, you’ll have an estimated value for your potential

listing.

Provide Professional Analysis

Now it’s your time to shine and demonstrate your value to the prospective

seller. At the end of your automated report, there should be a page to

provide your professional assessment of the subject property and suggest

a listing price. As a professional, you must take into consideration the

overall real estate market in the local market. Are property values on the

rise or are they declining? Discuss the current inventory, what are

comparable listing prices and how long have they been on the market.

This must be part of the discussion regarding listing price.

Run the CMA Program

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You are ready to present your report. Even in the smallest of markets,

likely each agent will present different CMA values and pricing

suggestions. You separate yourself by proper preparation. Understand

your CMA and be ready to discuss not only how you chose the homes you

used, but also what the report really says about the potential listing and

expected sales price. By this time you should be able to set the right

expectations about listing price, sales price and how long the seller

should expect the home to be on the market.

By careful preparation and professional presentation, a well-crafted

Comparable Market Analysis will help you and your business excel in the

competitive real estate field.

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