Educational Information 1/20/2019
by Patricia Feager
Comparative Marketing Analysis
Real Estate Agents use Comparative Marketing Analysis (CMA) to share information with Buyers and Sellers. This information may be collected from three to six months inventory of similar properties that are recorded in the MLS. It all depends. Data collected from the CMA is an opinion based on numbers reported. What is important to know is the interpretation of any data is subjective. For example, days on the market are aggregated and summed up in the CMA. Depending on who collected the data for a CMA it may include all number of days on the market lumped together on average regardless of the circumstances.
Whether the buyer buys with Cash or needs Financing the numbers will vary. For example, a cash offer can take ten days or less but when a buyer uses financing there are many reasons why it may take longer to close. When interpreting data there is a lot to take into consideration.
- There is a contingency that the buyer can’t buy unless they sell their home.
- There may be multiple contingencies, the buyer can’t the home they have under contract if there is a contingency on their home, and that other buyer has a problem and can’t close.
- A property went under contract but the buyer walked and the seller had to put their home back on the market.
- Lender required repairs postpone the closing.
- Government loans usually take longer to close than Conventional Loans.
- Environmental conditions, such as forest fires, tornadoes, hurricanes, blizzards, etc.
- There was an agreement between the Buyers and Sellers to close at a later date.
- A contract has a way out for the Buyer, i.e., Option Period, HOA restrictions, Title Commitment objectives, etc..
- Buyers Financing didn’t get cleared to close.
- Insurance Claims need to be satisfied prior to closing.
- Construction on a seller's new home needs more time and buyer agrees to delay closing.
These are just some examples. There could be many more. Days on the market can vary based on agreements between the parties or situations involved that delayed closing. When a prospective buyer and/or seller is presented with a CMA, there are many different variables to take into consideration and the context for that data is subjective to days on the market, list price, active, contract and pending listings.
Staying Positive Helps --- Patricia Feager