My Realtor prepared a CMA for me. How do I know if this price is what I should use as my list price?

Asked by Kelly, San Francisco Bay Area Mon Oct 29, 2007

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8
Keith Sorem, Agent, Glendale, CA
Mon Oct 29, 2007
Kelly
Thanks for posting your seventh question!

I beg to differ with the other posts. The Comparable Market Analysis is a useful tool, but only as useful as the interpretation that accompanies it.

Let me illustrate: (disclaimer - I do not know YOUR market.)
1. When the market is trending downward (the best indicators are: Sales prices are less than list prices, inventory is accumulating, meaning listings are entering the market faster than they are selling). In this scenario, a common one in California, means a couple of things:
a) The overall value of homes is declining, so in a very real sense, time is money. That means as a seller you have a couple of options:
i) Price your home at your wish price, and watch it decline in value
ii) Price your home that the current market price and face longer listing period and gradually reduce the price (we call that "chasing the market"
iii) Price your home at the price you think at which it will sell. In a declining market, that means you would price it "under" market based on the sold listings from the CMA.
SOLD listings did not "sell" yesterday. They entered the market, went through some price reductions (probably 5-10%), finally enter escrow, then after escrow (30-60 days) they "sell". So the data is dated.

In a down trending market, the more accurate sales figures will be in the pending sales. Have your Realtor contact the other Realtors with Pending listings and find out at the amount they are in escrow.

Even in a declining market, a properly priced listing will still net the seller the most money if it sells in the first 3-4 weeks. Consider underpricing your property by 5 -10% in order to maximize the net profit. Also, condition is critical. Above market commission, a buy down program, and staging might be prudent.

Consult your Realtor.
Good luck!
1 vote
Liz Stevens, , Berkeley, CA
Mon Oct 29, 2007
The "CMA" is anything a licensed person decides to make it. It is neither precise nor based on real comparables unless those sold properties are part of a development of like kind. Model A in a development is easy to price, but the varied architecture in SF and the East Bay - the real east Bay (Berkeley, Oakland, etc.) make the CMA dependent on the agent's expertise and track record. Find someone who has sold properties in your neighborhood recently and ask them about the usefulness of their price to the success of your home sale. Be a diligent consumer! Liz stevens
1 vote
Wendy Taylor,…, Agent, Beverly Hills, CA
Wed Oct 31, 2007
A CMA is a guideline for pricing a property that can be adjusted depending on what information is put into the different fields. Your agent is the best voice for knowing what a house should be priced at.

The market is changing and the strategies are different today than they were six months ago. Consult your REALTOR and trust their advice.

Good Luck!
0 votes
Carrie Crowe…, Agent, Southaven, MS
Mon Oct 29, 2007
A CMA is based off of recent sales in your area. It let's you know what buyers are willing to pay for a home in your area. If you are uncertain about the CMA, ask for a 2nd opinion. Be wary of agents that suggest a price that is too good to be true. There are agents that will wow you with a great CMA to get the listing, you are then stuck with a house that is overpriced and needs to have a major overhaul on price.
0 votes
Infinity Rea…, , Saratoga, CA
Mon Oct 29, 2007
I agree with Kelly as far as a CMA being pretty clear. If there are immediate area specifics that make it hard to use the CMA, then your realtor should have suggested what options you have. I guess i would say trust your realtor, sometimes alot of buyers will second guess a realtor for fear of the market. This is understandable, but seems like you have chosen a prefessional so let him step up and make the call. If your just not sold on his take on the CMA then by all means request a second opinion, but make sure you dont go back and forth, and are indecisive.

Good Luck
0 votes
Greg Kiely, Agent, Newton, MA
Mon Oct 29, 2007
Kelly,

If the CMA didn't clearly answer that question for you, I would ask a different agent to prepare another one for you. The CMA should be pretty straight forward and provide a clear picture of where your house needs to be priced.
0 votes
Mary Fenton, , San Francisco, CA
Mon Oct 29, 2007
The CMA is the tool we use to come up with your list price. Looking at the sold prices of surrounding homes and finding those that are most like yours should give you a clear picture of what yours will sell for. There are different stragtegies for pricing, and I don't know which your Realtor suggested, but the main thing to keep in mind is that overpricing is dangerous. You most likely came up with a range from the CMA. Within that range, you are in the driver's seat and can choose the listing price, but I would definitely listen to your Realtor's strategic advise. At some point you have to trust the expert!

It would also be helpful for you to visit the open homes in your neighborhood. This will give you a good idea about what is priced where. Have your Realtor keep an eye on the houses you have seen; they can report back on the sales status.
0 votes
Pete Sabine, Agent, Martinez, CA
Mon Oct 29, 2007
A Competitive Market Analysis or CMA is an accurate depiction of available like kind competing homes for sale.

A CMA, recent pending sales and recent sold properties- these three categories will usually provide a sufficient cross-section of relevant data to determine a range of fair market value and list price for your home.
0 votes
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