Why a CMA is vital in Real Estate
“A comparative market analysis (CMA) is a document prepared by real estate professionals to help determine the selling price of a home by comparing it to recently sold homes in the same area. To create a CMA, real estate professionals look at the price of recently sold, active, and expired listings that are similar comparable to the home they’re trying to sell.” Says Emile L’Eplattenier Author of How to Run a Comparative Market Analysis (CMA) the Right Way. Emile is right on point defining a CMA, and she also goes into debt how for many years real estate agents have been intimidating on running these analysis. Also having this weird perception that only real estate veteran can produce an effective comp, but with the right tools and software and a bit of hard work, any agent can put together a great CMA. Emile says there are two general situations where running a CMA is essential. For a listing appointment so that when you want to tell a homeowner how much their property is worth in the current market. With that being said you can also adjust the price when listing a tad bit higher than the comps you get to avoid the low ball offers out there. Also to help a buyer find a good deal, helping buyers not only find their dream home, but buying it for the right price. It’ll determine the home they are interested in is a good deal or not. “You will eventually be able to know right away when a home is overpriced, but if you’re just starting out of working in an unfamiliar area, a thorough CMA will tell you if a home is priced right.” “Those who list, last.” “Though it may be a bit of a cliché, it’s a cliché for a very good reason. Agents who get sales listings tend to do well and stay in the industry longer than those who are stuck working with buyers. There’s no way around it.” Those are wise word from Emile also along with marketing and closing expertise, determining the value of a client’s home is one of the most important skills a new agent can learn. It’s one of the only skills that separate the professionals from the amateurs. It is extremely difficult to get an accurate analysis without an MLS. Taking it to another level whether you investing in real estate or have investors in real estate CMA’s will determine if the investors/ lenders will want to close that deal. Most of the time investors don’t have access to the MLS so they usually like to work with realtor’s due to getting the right numbers for the variety of homes they’re looking for. It is vital for investors or lenders to have the right numbers due to them going into the deal with several factors, and numbers adding up their return of investment. Like redeveloping homes might be their purpose for that ROI. As a realtor it really does determine how effective a realtor can be due to their CMA’s.