Whether you’ve put together a million CMA Reports, or you’re working on your first one, there’s always room to improve! Today, we wanted to talk about property statuses to include in your CMA Report. Most agents use recently sold and active listings, but what about pending listings, and even expired listings? In this blog post, you will learn how using all of these statuses can be an asset to you and your clients when determining listing price. Let’s dive in.
What is a CMA?
A Comparative Market Analysis, or more commonly known as a CMA report, is the heart of every listing presentation. A well done CMA report can sell your skills as an agent, and help you overcome the most common seller objections. But more importantly, your CMA will help you determine a proper suggested list price. Because, how well the home is priced will oftentimes determine how long the home will sit on the market. An important way to show your potential client you’re the expert is choosing the right comps.
In addition to including the right amount of comps in your CMA report, choosing comps with a variety of property statuses is also important. But do you know which property statuses are most important to include and why?
Most Important CMA Property Statuses (and why!)
In W+R Studios’, 2020 Survey of Best Practices for CMAs and Listing Presentations, we asked agents which property statuses they frequently include in their CMA reports, and here’s what we learned:
Agents, this comes at no surprise, 98% of you agree these are the best comps! You know sold listings are essential in explaining the difference between pricing at market value, versus above or below. And, choosing homes that have been sold in the past 6 months and that are similar in square footage, features, condition, and location help you effectively come up with a fair price for your client’s home.
There’s no question why 85% of agents include active listings in their CMA. The asking price for other homes on the market will make your clients aware of homes competing against theirs for homebuyer dollars. If a similar home to theirs hasn’t sold, it’s a good idea for them to understand why.
These can be a good indicator of how long homes are on the market in a particular neighborhood. Be careful using these as comps because they won’t show a final selling price until the property is sold. However, pending listings still show recent market activity to give your clients a full picture of what’s happening in their area. Even though these can be a hit or miss, 74% of agents still use these in their CMA reports.
And lastly, 22% of agents include expired listings in their CMAs. These comps are the poster child for explaining to your clients what has not worked in their market – in other words homes that didn’t sell. So while they are not the most important property status, they will help you overcome any objections from your clients about choosing a list price that is above market value since pricing a home too high is most often the reason listings expire.
Translating CMA to Suggested List Price
So there you have it! Now you can walk away knowing which property statuses you need to include in your CMA and confidently present your suggested list price at your next listing presentation. Arriving at a list price with your clients is never easy. But when you do choose a fair suggested list price it will help alleviate friction down the road and foster a good experience between you and your client, all while selling their home in the most efficient manner.
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