It has always bothered me in the real estate world that with the mountains and mountains of paperwork to tend to, a little more effort on the Comparables Market Analysis (CMA) is in order. Entirely too many agents throw raw data at a customer on a handful of Actives and Solds and expect the client to figure it out. Some don't even explain what it is used for.
What needs to occur to be a tad more helpful is to show similar properties in square footage, geographic area, pool or no pool, year built, and then determine a "range" of prices that a property could be offered up for sale.
Next, an explanation of the idea that as you raise your asking price less of the buyers will view the property. For example at market value 60% of the buyers will view the property. At 10% above market only 30% of buyers will view the property.
Some basic understanding of what a CMA is for and interpreting it with just a little more analysis would go a long way toward being much more helpful in setting pricing strategy.
Gary: I think this is the first time I've run across your blog. I found you among the 719 members on the site right now. I'm subscribing to your blog!
Mike in Tucson
Gary - Good reminder that a CMA should always show a range of the potential list price rather than a set figure. Our team also indicates this range when we fill out a net sheet.
Graphs work great for showing sellers how overpricing their home relative to the market will affect the chances of it selling. I believe the Camp 4:4:3 materials have an illustration of this.
Karen: I agree that too much information for some is overwhelming. We have to guide them to its underlying meaning.
Mike: Thanks.
Carol: So true about market trends, like whether it is a buyers or sellers market or if the market is still in decline and you are chasing prices down.
John: The overpricing effect on who ends up seeing your house cannot be emphasized enough. In the Camp 4:4:3 materials they illustrate it with a triangle with less buyers as you go higher in price over market.
Linda: I know some agents wing it. It's amazing. Maybe they want a listing at ANY price.
Kay: CMAs are just a tool to help sell the house if used properly.
BRAVO Gary...Whatever we do for our customers and clients we should do with thoroughness. The CMA is only a piece of paper with numbers on it. The same with the listings. It's how we help them understand and INTERPRET the information is what is important. That is why REALLY KNOWING your market is an essential tool.
Kathleen
Marc: My hat is off to you in not using a CMA. You must be the real local expert and a trusted advisor to your area clients. It's interesting for those newer in the business how the CMA tool is viewed as almost mandatory on listing appointments. I found it very useful but that is the part of me that likes to pay attention to details. It's my information junkie side.
Kathleen: Excellent point that we are the interpreters of the raw information.