Pretty much ANY real estate agent you use... with the exception of some of the limited service brokers that just put your listing on the MLS when your credit card payment clears... perform some sort of CMA on your property prior to listing.
But what IS a CMA?
That is a great question, and there are a few answers... depending on local tradition.
The C could be Comparative, Competitive, Comparable, Current... I think some people just pick something and run with it because it starts with a C.
The M is almost always Market.
And finally, the A is almost always Analysis.
Of note are words that should NOT be connected wit ha CMA done by a real estate agent...
- Certified - By whom would be the question I would ask...
- Marketing - That should be a completely different portion of the conversation...
- Appraisal - Unless the agent is a licensed appraiser, they are not allowed to call the CMA or anything else an appraisal.
Some of the ones I've seen should really be called Completely Meaningless Anomaly. Rather than pulling comparable properties based on the criteria a buyer might use when comparing properties, the agent uses the CMA to confirm a pre-determined price. In some cases it is to make the seller feel that their price is justified. In other cases it is to make the sellers feel their price is NOT justified. In either event, instead of letting the comps show the value, the comps are selected to derive a value.
So, how should we look at a CMA?
Honestly. Seriously. Completely.
Let's start with honestly. Look at the comps. Back personal tastes and preferences out of the mix. That is very difficult, but things like giant flower wallpaper in the bathrooms DOES NOT add a lot of value. Even if it was expensive. Likewise the shag carpet. And (I hate to say this) the 11 car garage... for the otherwise $350k property. Most buyers aren't going to add a lot of value.
That is not to say that the right buyers won't add value for those features Just not the value you might want to derive from them.
And moving to seriously... Most agents have some idea of what buyers are looking for. Agents that spend time with buyers have the best track on their tastes. Even if you know that you don't want to work with an agent, work to understand their methodology. Even a junky CMA can have some great tidbits... if they are recognizable.
Each different section of information has something important. Let's look at each type of listing information.
- Solds - These are the ones that most agents place the most emphasis on. These are the properties that have sold and closed. The strength of the Sold Listings is that they represent actual market prices that were paid. The weakness is that they represent sales that are old... In the current market, even 30 days may be old. And the closed sales represent deals that were negotiated at least a month ago. More likely six months or a year... or more.
- Pendings - The great thing about pendings is that they are generally fresher. The problem is that we don't know the details until they close... 30 days or more generally after the deal was accepted.
- Active Listings - Know your competition.
- Expireds and Withdrawn Listings - These are the ones that were rejected by thge market.
You may or may not know this, but I just turned the CMA on it's head.
Stay tuned for Part II
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