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Page 10

The HOW TO Guide of Listing Presentations
Instructor: John Henderson

0:39 Minutes

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Module 1 Lesson 3 - Comparative Market Analysis


A well-made CMA serves 3 functions: 

1. Wows your clients with your professional approach and knowledge. 
2. Dissuades your clients of incorrect market information.
3. Presents your clients with a reasonable range of value. 


If your CMA doesn’t accomplish these 3 goals, its time to re-work it. Most MLS systems offer a CMA generator. It will produce dozens of pages of colorful information. However, too many agents do a poor job understanding the information and communicating the data. Clients are left feeling the agent really doesn’t understand the nuances of selling their home. Using more paper will not wow them. Good data will. That’s why it may be smarter to build a CMA rather than use a generated one.


CMA – A seller’s perspective

A good CMA comes in two sections. The first part is based on the property’s history and specific neighborhood. Think of it as the seller’s viewpoint of the property. It includes an appreciation forecaster, SEV valuation, algorithm review and a MLS map and list of all recent activity in the area. 


1) Using tax data and home appreciation indexes (which can be found online), calculate an appreciated value based on the historical purchase price and sale date. Clients enjoy seeing values tracked historically.  


2) Some home owners believe their home’s value is 2 times it’s SEV. We’re not convinced using the SEV is a good way to determine value but, use it as another data point to consider. 


3) And then there is Zillow & Trulia. Home sellers are very familiar with these websites so it makes sense to add it to your presentation package of information. Often these algorithms aren’t accurate and need regional adjustments. So, it’s smart to present two numbers: the website’s published value and the regional adjustment. 


4) Using the MLS’s map search, draw a tight parameter around the property’s neighborhood. Use the One-Line CMA page to identify local activity. It will give you high, low and average values of active, pending and sold homes. 

Using these 4 pieces of information, you can create a range of values. It’s great when all 4 numbers fall close to each other. The narrower the range the better. The best CMAs can predict a home’s selling price within a range of $5,000. 

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