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What's in YOUR CMA? Mandatory Guidelines for Creating a CMA ...

It is what we do. We create CMA's for people all the time. CMA stands for a Current Market Analysis or Competitive Market Analysis. This is where we do research to determine what our OPINION of value is for a specific property. This answers the question: What will my home sell for?

Most of the time, we, as Realtors® create these CMA's for folks that are considering using us to sell their home. It is an integral part of what we do.

However, most Realtors® are not appraisers, so a CMA is merely an opinion. Granted, it is a very educated opinion, but it is still an opinion by a non-appraiser nonetheless.

That is why in any case that a Realtor® creates a CMA for a purpose other than for servicing a potential Seller, there are certain guidelines that MUST be followed.

What other purpose could a Realtor® create a CMA? Well, the most popular non-potential-sale purpose of a CMA is for estate purposes: Someone wants to know what to tell a lawyer regarding the value of their recently deceased uncle's house.

When preparing a CMA for a purpose other than for a potential seller, a Realtor® MUST include the following items, per the Realtor® Code of Ethics, Article 11:

Identification of the property that is being evaluated
What "value" the Realtor® comes up with
Data to back up the "value" opinion, like statistics.
Whether or not there are any "limiting conditions" that may affect the "value" - and what they are
Anyone who may have an interest in buying or leasing the property or anyone who may be possibly representing the buyer or seller in the future sale/purchase of the property
What date the CMA was prepared
A statement to the effect that this is an opinion of value and not an appraisal

These are the guidelines that any Realtor® in any state must follow, and if a Colorado real estate agent is NOT a Realtor® they still must at the very least supply a statement like the following: "The preparer of this evaluation is not registered, licensed, or certified as a real estate appraiser in the state of Colorado."

These guidelines are in place to protect the public from any intentional or unintentional misrepresentation of property value.

Posted By: Mariana Wagner - Colorado Springs Realtor®

Posted by Mariana Wagner ~ Colorado Springs REALTOR® on 09/27/2007 03:21 PM

Comments (21)

colorado springs real estate, colorado springs, colorado, code of ethics, cma

21 Comments on What's in YOUR CMA? Mandatory Guidelines for Creating a CMA ...

SEP

2007

Mariana... I appreciate the information, and even after a few years in this business you pointed out some things I was not aware of.

Thanks again

Corie - I am always learning something new. I am glad you found it useful.

Good information. Thanks for the post!

Hi Mariana,

It's always nice to know we're doing things the way we should professionally be doing them. Thanks for the post and congrats on another Feature!

Connie - Sometimes it is the little things that keep us all up to par... or better!

Lisa and Roger - Cool! I didn't even notice that it was featured until I read you comment... me=perceptive??

Isn't an appraisal by an actual appraiser also an opinion of value?

Very interesting! I had no clue about that requirement. Thanks!

Kelly- Yes. But it is an opinion from a licensed and certified person.

Christopher - There are a lot of little things to consider.

Mariana - thanks for sharing this valuable information. I have to admit I was not aware of that requirement. Haven't done any for non-sellers so I guess I'm safe. :)

Jeff

Good Information, after 25 years I did not know the requirement of adding any interested parties to this CMA. Even after serving on Grievance boards and reading the REALTORS code of Ethics many times. Thanks for a great bit of information. Pat

SEP

2007

Interesting post. Interesting facts. Thanks for sharing.

I really enjoy all your posts. Where do you find time for so many?

I'll tell my clients if they doubt my opinion of value...they should have an independent appraisal done before they price the home for sale. I also let them know that it doesn't matter what I think their home is worth ...it is what the buyers and the sellers are negotiating within the neighborhood. But remember...just because an appraiser says the value is too high..doesn't mean they are correct..maybe if the value is too low then what do they say? It goes both way it doesn't nessasarily mean they are right...or we would have all different appraisals on the same property. It is a very contraversial subject...the range of value is probably a better way to put it.

Hi Mariana - another great helpful post! I had no idea of that requirement, and I thank you for writing this post to make us aware of it.

Ann

Jeff - I am finding that there are a lot of folks who did not know all the details surrounding this.

Pat- I learn something new every day!

Bob and Carolin- Thanks!

Rich - I actually do a pretty good job at time blocking for blogging. I have to or either my business or my blogging fails.

Neal - A range is always a better answer. Thank you.

Ann! It is an odd requirement, but it makes sense.

Butterfly (Mariana)...

Whoa...Only 15 comments on this?

What's up with that?

Hmm...Perhaps we have folks that would rather not follow a few simple guidelines :)

TLW...ROAR!

SEP

2007

TLW! I think that "information" will NEVER be as popular as "drama" - ? Oh well. Maybe there were many more who read it than commented ...

SEP

2007

Perhaps I state the obvious but I usually add a disclaimer that the CMA is only 'good' for the date it was prepared. Real estate values fluctuate. New listings come on, old ones go off. (i.e. downtown NYC real estate on September 10th versus September 11th, 2001). I think the point to stress: There is a 'shelf-life' for the underlying comp's and my own opinion of value.