“Free CMA’s! Git ‘Yer Free CMA’s!”

“Those who know, don’t talk; and those who talk, don’t know.”

–stock market saying.

What’s true in the stock market is also true in real estate.

Namely, the value of what Realtors call a “Comparative Market Analysis” (“CMA”) that can be had for free is . . . about what you pay for it.

As I tell prospective clients, there are two reasons I don’t do free CMA’s:

One.  A home’s fair market value isn’t a static number.

On the contrary:  a skilled, experienced Realtor can easily add 10% to 20% to a home’s list price by recommending strategic, cost-effective repairs, updates, and staging prior to putting the home on the market.

Two.  Time investment.

I don’t know about other Realtors, but, depending on the individual home and the price point, it can take me 3-4 hours to do a rigorous (read, “accurate”) CMA.

First, I identify the subject home’s peer group:  typically, “Sold” homes that are similar in style and features, that have recently closed.

But, depending on the circumstances, I may also include relevant “Pending” sales and even “Cancelled’s” or “Expired’s.”

No Shortcuts

Next, I identify the key differences between the Comp’s (“Comparable Sold Properties”) and the subject home.

Those include updates (or lack thereof); size (“finished square feet – above” is the key metric for both Realtors and Appraisers); floor plan; curb appeal; and location (within an already narrowed geographic area).

Just as important as isolating the key differences is assigning a dollar value to them.

Finally, I test the price range developed from the preceding analysis against the competition — similarly priced “For Sale” homes.

Typically, that means spending a couple hours previewing nearby “Active” listings.

As Realtors like to say (and I agree), either competing homes help sell your client’s . . . or your client’s home helps sell the competition.

My job is to make sure it’s the former — and that’s not something I can afford to do before I’m hired.

P.S.:  That time investment is also why, as a Buyer’s agent, I defer doing a CMA until my client has identified the home they want to make an offer on (or at least, 2-3 finalists).

See also, “Realtor Postcard: “Call or Text Me to Get Your Free July 2017 Report on Neighborhood Home Prices“; and “Proper (and Improper) Purposes of Realtor Previews.“



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