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The Buyer CMA. Do you use it?

By Bryant Tutas

Real Estate Broker/Owner with Tutas Towne Realty, Inc and Garden Views Realty, LLC BK607690

October 31, 2009 06:28 AM

Realtor training 407-873-2747

Hi folks. Lenn Harley wrote a post today titled "Looking at Real Estate Teams and Team Specialists". If you haven't read it please take a moment to do so. In her article Lenn wrote...

"The assumption is that training for property valuation is for listing agents for CMAs and not for buyers agents. IMO, one of the most valuable skills any real estate practitioner can have is that of accurate property valuation."

I have to say I agree with that statement. As most of you know I have been primarily a listing agent for many years. Over the last 18 months or so I have had to revamp my business and now find myself working with more and more Buyers.

I find that one of the advantages I have is that I know how to value property. My market is saturated with foreclosures and Short Sales. Because of this, the listing price means nothing. The listing price is normally quite a bit lower than what the property will eventually sale for.

The purpose of a low listing price is to create a bidding war. I completely understand this strategy and have no problem at all working within the rules of this "game".

My Buyers are counseled to make offers based on the value of the property not the list price. This is very important for Buyers and their agents to understand when working in this kind of a market.

How many of you have had Buyers that insist on offering below listing price on every property they look at? How many of you counsel then to do this? Is the extent of your counsel telling Buyers to offer 90% of list price? Be honest. When was the last time you prepared a full blown CMA (Comparable Market Analysis) for a Buyer?

Do you even know how to prepare a market analysis? From some of the offers I see coming in on my listings my opinion is that..no..you don't. Your Buyers are missing out on properties because they are hung up on the listing price. Your job is to make sure this is not a stumbling block for them. The best way to do that is to make sure you are giving your Buyers a CMA.

This Buyer CMA can be for a specific property or it can be based on the style and type of property they are looking for. Does that make sense?

Here's a CMA I prepared last week for a Buyer. We ended up getting his offer accepted even though there were about a dozen offers on the property. Check it out. Any questions?

CMA 816 Halifax Dr Kissimmee FL 34758

Bryant Tutas
Broker/Owner
Tutas Towne Realty, Inc
Licensed Florida Real Estate Broker
http://CentralFloridaShortSales.com

http://ShortSaleSuperStars.com

Are you a Florida REALTOR(R) looking for a change? Check it out.

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Vicki Lloyd

The Lloyd Realty Group - San Diego, CA

(619)452-9798, Real Estate San Diego California

In my local market, I carry a CMA in my head and don't even show the ones that are totally out of line with reality. When I first start with a new buyer, I prepare a CMA to give them an idea of what they should really expect in the house that they are qualified for and has the features that they want. (Sometimes, it means drastically having to change their expectations!)

Before writing an offer, I also prepare a formal CMA for that property, and then we work out the strategy to negotiate!

Nov 01, 2009 04:18 AM

Joyce Thomas

The Thomas Group Brokered by eXp Realty - San Tan Valley, AZ

Your Home Sold Guaranteed!

We use them all the time. It is a great way to show the buyers the value of the home they are making an offer on.

Nov 01, 2009 08:50 AM

Kristen Wahl

Re/Max Plus - Rochester, NY

CBR

I definitely complete CMAs for my buyers. I feel I would be doing them a disservice if I didn't. That's what a buyers agent is for, to counsel them on their best course of action. Good post, Bryant, and I hope you encourage everyone to use this valuable tool!

Nov 01, 2009 09:12 AM

Linda Lohman

Fonville Morisey Realty - Cary, NC

Former Teacher/Broker

I'm in agreement with several of the above comments, a buyer's CMA is part of the service a Buyer's agent should be offering. How can you make an offer without seeing the competition?

Nov 01, 2009 09:23 AM

Linda Powers

Resort Realty - Duck - Duck, NC

On the Outer Banks

How can we do our job for buyers without a CMA? In my market we deal with correctly priced homes, those where the seller says sell but at his price, and those overpriced listings taken by agents who want to be the top dog lister in the market. You know ... the ones who within 30 days begin the price reduction game.

Without a CMA there is no way to help the buyer make the financial decisions for property under consideration.

Nov 01, 2009 09:46 AM

Linda Powers

Resort Realty - Duck - Duck, NC

On the Outer Banks

Without a CMA there is no way to help the buyer make the financial decisions for property under consideration.

Nov 01, 2009 09:46 AM

Candice A. Donofrio

Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ

928-201-4BHC (4242) call/text

I also use a CMA summary that shows the list/sale price ratio. in addition to all the above info . . . which is great.

If the list/sell ratio is averaging 97% and average DOM is 90 . . welllll buyer might want to rethink that 30% low offer on a week old listing . . . :)

But yes, a buyer's agent's responsibility is to inform buyer of the market value of comparables at the time of offer.

Nov 01, 2009 10:12 AM

Peggy James

SAMSON PROPERTIES - Woodbridge, VA

Woodbridge Virginia Area Real Estate Specialist

Great Post!

Before I leave the office to go show the homes, I have already researched on MRIS the market values of like properties for each of the homes I'm going to show that day. I have created a simple CMA Format that I can print and attach to each listing. That way when we get to the house, and if my client shows an interest or starts to ask questions, I have all the information right there with me. No need to go back to the office for comps. I have everything they need, as well as a blank contract. Our market here in Prince William County VA is fast. Any Realtor who is not helping a home buyer in this manor and just submitting an offer at a buyers whim, is doing them a huge disservice.

Nov 01, 2009 10:48 AM

Dan Quinn

The Eric Steart Group of Long & Foster Real Estate - Silver Spring, MD

Dan Quinn

I always provide a CMA to my buyers when they submit an offer. It is one of the services that I routinely provide for my buyers. The better educated they are about the market value of the home they are interested in, the more secure they will feel when they make their offer.

Nov 01, 2009 12:11 PM

Stacie Colclasure

Gateway Holding and Referral Company - Bethalto, IL

Realtor, Bethalto, IL

I've always thought it was part of my job as a buyers agent to offer them a CMA. But I have recently learned that it's not a very common practice in my area. It's just one more way for me to differentiate myself I suppose.

Nov 01, 2009 12:42 PM

Christine Donovan

Donovan Blatt Realty - Costa Mesa, CA

Broker/Attorney 714-319-9751 DRE01267479 - Costa M

It only makes sense to look at the comparables before writing an offer. Otherwise, how do you know what to offer?

Nov 01, 2009 12:55 PM

Svetlana Stolyarova

Local-n-Global Realty, Cleveland and International Real Estate Solution - Mayfield Heights, OH

Local-n-Global Realty, Broker 216-548-4663

How can anyone represent the buyer without preparing a detailed CMA? What's then the point of buyer's representation?

Your sample analysis is very persuasive.

Are you really selling these great homes for under $100K?!! Why in the world not everyone buying them?

Nov 01, 2009 01:14 PM

Sharon Parisi

United Real Estate Dallas - Dallas, TX

Dallas Homes

I cannot imagine writing an offer without studying comparables. I like the idea of a brokerage requiring s for their records. I keep CMAs in my file, along with other paperwork.

Nov 01, 2009 02:52 PM

Kris Wales

Keller Williams Realty - Lakeside Market Center - Macomb, MI

Real Estate Blog & Homes for Sale search site, Macomb County MI

I would be flabbergasted if a buyers agent didn't do a market analysis for their buyers prior to writing an offer. How in the world would a buyer know what is a fair price for the home without one?

Also, I love the ammunition that an analysis gives me should the offered price be much lower than asking price. It's hard to argue cold hard facts when I have them in front of me during an offer presentation.

Nov 01, 2009 09:03 PM

John Occhi

AZ Veteran Notary Services - Marana, AZ

Mobile Notary Public/Certified Loan Signing Agent

BB,

After reading this post and commenting above, this message resopnated with me and inspired my own article, where I do reference this post -The Real Estate Market Continues to Change: Agents Need to Change, Too!

Thanks again for being so insightful.

John

Nov 02, 2009 03:11 AM

Will Goodson

Sheffield Properties/Private Label Realty - Austin, TX

Bryant, thanks for the excellent post. Buyer CMA's are very important in this market (well, any market really). I can't imagine offering advice to a buyer that ISN'T based on the most up to date information. It would be such a disservice to my clients. I have been trained on how to do CMA's that work great for buyers and sellers. I like to put all the info in a 1-2 page Excel sheet. Then I print the individual listing MLS sheets and attached with them. I want to the buyer to see the figures first, then review the sold properties. It helps them decide what the want to offer by viewing what other similar properties have sold for in the area.

Nov 02, 2009 05:07 AM

Bryant Tutas

Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL

Selling Florida one home at a time

OK so the comments om this post just [prove that the members of ActiveRain are a cut above the regular agent. You guys are almost unanimous about using a CMA with your buyers.

WELL DONE!!

Nov 02, 2009 07:32 AM

Mark Roncone

Charles Rutenberg Realty - Oswego, IL

I just did 2 buyer CMS's today.

Nov 02, 2009 07:41 AM

Robin Rogers

Robin Rogers, Silverbridge Realty, San Antonio, Texas - San Antonio, TX

CRS, TRC, MRP - Real Estate Investment Adviser

I always do a CMA for buyers, and this is an excellent reminder of the reason why.

Cheers,

Robin

Nov 04, 2009 01:18 AM

Muffy collins

Bridgeport, CT

Bryant, I agree, it is very impt as a buyers agent to do a complete CMA for your clients. I have always done this but I have not always presented it with the offer. Thanks for the post!

Nov 05, 2009 03:36 AM

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