comparative market analysis
CMA’s – Comparative Market Analysis for Sellers. This is an article written by Elizabeth previously, for another website. She breaks this term down beautifully for a reader. I notice lots of agents say “CMA” when talking with clients. This sounds as though everyone understands our slang terminology. You will understand what a CMA is about after you read this article,
Enjoy, — JaCi
“I don’t always prepare a full-blown CMA package for listing presentations. Sometimes, the seller already has a handle on the market and knows what is for sale and which homes have sold. Besides, for sophisticated sellers, they really don’t need to read all that miscellaneous data that often accompanies CMAs. For them, I print out a portrait CMA that shows the last six months of activity, including current inventory, days on market and median prices. Print and go.
Because that’s what lots of sellers want to know, coupled with how much extra value they believe that new roof should bring. For sellers who want a clear a picture of the trends in their market, it is the pending sales that predict which way the market is moving.
Sometimes the comparable sales are too old because the market is moving too quickly. And active listings are important only to the extent that they present competition. Not to mention, those prices can be all over the board and meaningless, regardless of how often a seller may point to the neighbor’s McMansion and want to list at a higher price for their 1,000 square-foot bungalow.
What Is a Comparative Market Analysis?
Although reports can vary, from a two-page list of comparable home sales to a 50-page comprehensive guide, the length and complexity of the report depends on the agent’s business practice. However, standard comparative market analysis reports tend to contain the following data:
Off-Market / Withdrawn / Canceled: “
— Elizabeth Weintraub
If you are thinking about making an offer on a house, there are many aspects beyond price to consider in your offer. First of all, make sure you have hired the very best Sacramento Realtor you can find with decades of experience. An experienced Realtor is going to know the finite details and there are so many.
The price, of course, is very important. So many buyers only focus on the list price and it can be way under market or way overpriced. Our Code of Ethics suggest we do a comparative market analysis every time we write an offer. I certainly do. Not every agent specializes in listings nor have they listed hundreds properties, which makes pricing property a pure art form. So many aspects, I could write a short story just on pricing!
As the buyer, if you are obtaining a loan always make sure you have your loan letter is attached to your offer. Hopefully, you have been ran through lender automated direct underwriting. Additionally, as we are talking about attachments, have your proof of downpayment and closing costs in your name and dated in current month, always provide those to your agent.
Write a letter to the seller about why you love this home so much. Talk about celebrations you will have there and how much you love a few particular features. Don’t underestimate the power of letters. My own house had 10 offers and the seller chose an offer, due to a letter. And the seller was an agent, me.
The costs of sale in the purchase agreement are important. Always a good idea to split the costs or, in seller’s markets, pay entirely for title and escrow. The transfer taxes and home warranty can also be split 50/50. The natural disclosure company should always be noted, we use Property ID for $99. Try not to ask for personal property (lenders don’t like it) unless you expect, for example, that the washer and dryer will stay. Your good faith deposit is always important. In California, liquidated damages are 3%, so it is a good idea to have an earnest money deposit be less than 3% of the purchase price.
Time frames: always find out from the listing agent what the sellers need regarding closing date. If they want time in the house after closing, great, give them a week or two. This can win the offer for you. Schedule your close date at the first date the lender says they can close escrow. Shorten time for inspections and appraisal contingencies. In some instances, you can remove the appraisal contingency upfront.
Do not ask for repairs such as pest clearance or or roof repairs in your offer, which can sour the positive mood of the seller. You have an inspection time period to verify everything, so don’t ruin the day for yourself. Shorten the inspection and loan contingency dates as that will help instill seller confidence in your offer.
This does not mean you can’t ask for repairs, but it depends on what it is and how much. I usually suggest to clients that they do not ask for anything not related to safety items; for example, wiring splices and improper venting would qualify. Breakers that are not working correctly, also another safety item, a red flag. A closet door off the tracks, not so much.
There are many other items but these are a few important steps for your checklist when writing an offer on a house. Simply ask your Realtor to follow these guidelines and you will have a much better reception from the listing agent. If you want to win when you make an offer on a house, call Weintraub & Wallace Realtors today at 916-233-6957 We write offers to win!
— JaCi Wallace
Sacramento Realtors like me can make a strong argument for anything, including why the missionary position might be preferred by more doctors 5 to 1. I’m certain to offend somebody somewhere on the internet today, by talking about positioning. It’s incredible what people find to get riled up about. Some of them send me mean, snippy little emails, when I write a completely tongue-in-cheek blog. They don’t get it.
Like last week I wrote a blog about hearing aids and where the microphone is located on your cellphone. It was a light-hearted blog, mostly poking fun at myself and how I stuffed soda straws into my ear as a kid. Some old fart like me — I presume he was an old fart because I talked about how 80% of 80-year-olds can’t hear a thing — blasted me. He was pretty ticked off. He told me to stop using hearing aids to sell houses. But if I could actually use hearing aids to sell houses, you betcha I’d do it. Sorry, old fart.
The missionary position I’d like to discuss today has nothing to do with what you might be imagining. I consider myself a missionary of Sacramento real estate. It is my religion. I am pretty much consumed by it. Even while on vacation to see the butterflies in Mexico last week, I pondered how to get my sellers another two weeks in escrow because the construction of their new home was delayed. Constantly thinking, analyzing. I created a solution.
One thing I do all of the time is relentlessly study the comparable sales for my listings. I don’t always remember to share the results of the analysis with my sellers, my bad, but I got into a discussion about it recently. The seller wanted to reduce the price, and I cautioned against it. She was positioned beautifully.
I could see why she considered a price reduction. She was in a hurry to sell, and owned a somewhat unique home. Agent after agent sent buyer feedback that mentioned their buyers had made an offer on another property. That’s excellent news to me! You know why? Because it’s one less competing home in inventory. When every home within a mile goes pending, and you’ve got the only home left on the market, your home will sell.
Which is not difficult in our present Sacramento real estate market. Comps are one thing but you’d be a fool not to consider the missionary position. Look at the value, the price per square foot, and how many homes are selling for less. If there is none, you’re in like flint. Sure enough, my seller’s home popped into escrow at list price. Happens time and time again.
Trying to figure out if listing agents are on the level is often a gut thing for sellers and buyers. In fact, trying to determine if any sales person is handing you a pile of crap can be difficult because so many salespeople use scripts, canned presentations, or memorize lines designed to confuse or instill fear. I’ve certainly been running across the BS when updating my website, but at least I have a designing background and formal html education, and yet they still try to snowball me.
One web designer read my featured blog on Active Rain about 7 tips for updating your website and left me a voice mail yesterday about how she “suddenly” discovered Google errors and offered help. That web designer is a big part of the reason I’ve had to pay to have my site reconfigured and then redesigned a second time. Another put my website on an old server, and reconfigured the outdated server to work with my website rather than coding my website for my own host server. Both were horrid experiences. The sales presentations were good but the performances were terrible.
I was thinking about that when I met with a seller yesterday in West Sacramento. She has been talking with several listing agents about listing her home. I could use scripts and whatnot in my business, but I don’t. I just wing it. If you can believe that, and it’s true. Every person is different and every situation deserves a custom approach. I don’t worry about first impressions, persuading sellers to do business with me, or reciting prepared speeches. I just talk with them. I listen to their objectives and questions and do my best to address.
They either like me or they don’t, I figure. Guess I’m pretty lucky because most of the time they do. During this conversation yesterday at my seller’s home in West Sacramento — and I don’t even recall what I was saying — all of a sudden the seller blurted: You’re hired. That quick pronouncement took me by surprise but what the hey, I told her that was great, thank you, and she made a good decision. Because it was and she did.
As one of Sacramento’s top-producer listing agents, I don’t use a prepared listing presentation. Oh, of course, I email a comprehensive comparative market analysis, but the rest of my visit is devoted to finding out what my sellers want and delivering. I don’t need or use props. No 100-page books, literature or flip charts. People do business with other people. My impressive track record and 40+ years of experience speaks volumes, but I am the only person who speaks solely for me. And I believe that’s what sellers appreciate.
Home sellers in Sacramento often ask me how much is my home worth when that’s not really what they want to know. They want to know how much will their home sell for, and that could be two very different numbers. On the other hand, they might want to know if they can do a short sale, in which case the answer is always, without fail: the price will be market value, based on comparable sales, providing the seller qualifies.
It’s not the sellers’ fault. Sacramento real estate can be a big confusing can o’ worms. I imagine sellers hear all kinds of crap from neighbors, coworkers, relatives and others whom, even though they might have actually sold a home or two, haven’t worked with an agent who works the way the one in front of you does.
People think it’s OK to hit up an agent for a sales price. Why do they think it? Because real estate agents have encouraged them to behave in that manner. Why else, we think, would anybody ever want to talk to us unless it’s to find out how much their home is worth — its market value? We’ll give them a free Comparative Market Analysis. Free, because it’s not worth anything.
Before I was licensed, I dismissed agents from the possibility of listing my home because they lowballed me on market value. At least that’s what I thought. Because I didn’t really understand how market value is determined. You can’t just give an agent your address and expect that person to name an accurate number. Maybe a range. Not a precise sales price.
I wouldn’t even give my next-door neighbor a sales price without completing an in-depth analysis of his features and studying the past 3 months of sales as they pertain to his home, and I live next door to him. I also sell hundreds of homes. I should know, right? Because I am a Sacramento real estate agent, I keep pretty close tabs on what my own home is worth, but I couldn’t give you an exact number on my house — even if you stuck burning toothpicks under my fingernails and sang horrible 1980’s songs out loud — without an analysis.
Agents who do might short change. I’m not one of those.