Create a Smarter CMA
Consider this fact: Every word, action and document we present to a client either draws them closer towards choosing us as their real estate agent or pushes them farther away. That is particularly true of CMAs. Here’s a few thoughts on building an irresistible CMA.
A well-made CMA serves 4 functions:
Presents a reasonable range of value. Dissuades sellers of incorrect market information. Assists sellers to view their property from a buyer’s perspective. Wows your clients with your professional approach and knowledge. If your CMA doesn’t accomplish those 4 goals, it’s time to re-work it.
Most sellers see their property from their prospective only. So, it’s OK to start there. Use neighborhood CMA information, tax data and home appreciation indexes (which can be found online). Calculate an appreciated value based on the historical purchase price and sale date. Many homeowners believe their home’s value is 2x it’s SEV. While the SEV is a poor way to determine value, I use it as another data point to present. And then there is Zillow & Trulia. Home sellers are very familiar with these websites, so it only makes sense to add it to your package of information. Locally, Zillow’s published value is usually 7.852% higher than reality. Using this information, you can create a range of values. It’s great when all numbers fall close to each other. The narrower the range the better. The best CMAs can predict a home’s selling price within a few thousand dollars.
But you’re not done yet. There is a second part to creating a great CMA. Home sellers only look at one home – theirs. Buyers on the other hand want to compare every available property. Think of this as presenting the buyer’s viewpoint. When buyers call you, they are usually looking for a particular school district or area of town. They’re shopping the number of bedrooms, baths and a few important amenities they want. Home sellers need to be aware of all competition buyers are seeing and comparing their house to. What price are the sellers considering to offer their house for sale? Does it fit within an average range or is it higher or lower? Is it far above the average price of competing homes for sale in the broader area? How many competing homes are available?
Knowing this information can help sellers position their property more competitively.
Sure, you can use the CMA generator found at FlexMLS. It will produce dozens of pages of colorful information. However, too many agents rely on that information to “sell” their services. 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.
You can offer your best professional advice and yet, isn’t the client the one who determines the listing price for a property? Sometimes, even the most reasoned guidance is ignored. If they want to offer their home at a price that is higher than your recommended range, let them. But there is one caveat – It’s OK to list at a higher price so long as they are willing to listen to showing feedback, heed what the market is saying, and be willing to adjust their price accordingly. And sometimes the loudest market feedback occurs when no offers show up – especially in this crazy seller’s market. Then, it’s time to move clients towards reality.
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