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The Purpose of CMA’s

The purpose of a CMA is to establish an accurate price range that a seller wishes to sell or a

buyer wishes to buy. An accurate range is one that reflects market conditions at the time and

place of the desired transaction.

Once an accurate property price is determined, the further purpose of a CMA is to help sellers

identify an asking price and buyers identify an offer price. CMA provides an objective, market-

driven starting point for pricing properties.

**DO NOT USE VALUE** TREC has stated that only appraisers can use the word Value.

New Construction – talk to a sales agent that works for the builder.

NO Comps – Hire an appraiser to give you a market value on the subject property.

Definitions

• Subject

The property being evaluated.

• Comparable (aka Comps)

A recently sold property that is substantially similar to the subject. Comps are used as a

basis for determining the price of the subject.

• Competition

A currently listed property that can compete for the likely buyers of a given subject.

• Adjustment

The amount added to or subtracted from the sales price of a comparable property to

arrive at an indicated price for the subject. Not all comps require adjustments.

• Neighborhood

A loosely defined geographical location within a city, town, or suburb. Know the

neighborhoods because price can vary greatly in different neighborhoods.

• Cost

The total amount spent to acquire or build a property or property component. Home

improvements are a cost and usually recoup %50. If a seller spent $15,000 on a roof,

this cost will not add $15,000 of value to the home. A buyer expects the home to have

one, and not all the maintenance cost can be recouped in the sale price.

• Price

The amount for which a specific property sold at a particular point in time, or at which a

property is currently being marketed. Price might or might not reflect market value.

• Market Value

The most likely price a property should sell for in a competitive and open market, where

both buyer and seller act prudently and knowledgeably and neither is under any duress

to complete the transaction, and where the property has been exposed to the open

market for a reasonable time. The market value is also referred to as the fair market

value or fair market price.

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Value vs. Price

The term value and valuation are usually reserved to pertain to appraisals and the work

of appraisers. Pricing pertains to CMA’s, listing prices, and the work of real estate

brokers and agents.

Number of Comps

Find at least 3 comps to as many as you can find that are appropriate to the subject.

Unsold listings that are similar to the subject are often used in CMA reports and

requested by lenders.

Choosing Comps

The general parameters for choosing comps are determined by the subject home. The

subject’s number of bedrooms and bathrooms, the size of its living space and lot, the

neighborhood and school district(s) in which it is located, its age and condition—all these

characteristics form the parameters for choosing comps. The more similar the

comparable, the fewer adjustments you will need to make and the more accurately you

can determine the value of the subject and price it correctly.

Adjusting for Gross Living Area

The GLA should be as close to the subject as possible. Generally if the difference in

GLA is 20% or less, no adjustment is made.

Exercise #1:

If the subject property has a GLA of1,934 and comp A has a GLA of 1,610, comp B has

a GLA of 2,300 would you generally want to adjust for the GLA?

Solution #1:

1,934 x .20(20%) = 386 1,934 -386= 1,548 1,934+386= 2,320

1,548-2,320 No adjustment should be made, both comps are less than 20%.

**For adjustments take Pricing Strategies: Mastering the CMA for a deeper

understanding**

When presenting a CMA for your client it is best practice to have them initial and leave

them with a copy if they ARE a client.

Using the 1004MC to get the health of a market

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1004MC Instructions

The Market Conditions Addendum (Form 1004MC) is designed to enhance the transparency of

the market trends and conditions conclusions made by the appraiser. The Market Conditions

Addendum is required with all one-to-four-unit property appraisals performed on or after April 1,

2009. This requirement applies to loans delivered to Fannie Mae and Freddie Mac.

The 1004MC allows you to see how many active listings were in that year. It will give you

Absorption Rate, Months of Housing Supply, and many more statistics.

1. Under Search go to Cross Property and select the 1004MC

2. Select all Criteria except Leased

3. Select Property Type

4. Select Sub Property Type

5. Select subdivision or zip or MLS area or draw a custom shape

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6. Click on Results

7. Select “All”

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8. Under “Actions” click on “Print”

9. Select the 1004MC and click on “Print to PDF”

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Months of Housing Supply

Balanced = 6 months

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Realist Tax Search Print the Property Detail report for the subject property from Realist.

Map Search

Tips

1. Enter the Status & Sub Property Type.

2. Select the Location.

3. Enter the property features last.

Note: You do not search by Price when searching for comparable properties.

Searching

Criteria Search

From the Matrix navigation menu, hover over the “Search” tab, select the desired property types from

the dropdown list, and click on the link for the type of search to run.

• Active, Active Contingent, Pending, Pending Taking Backups and Sold

• Sold Date: up to 180 days back but as close to today’s date as possible

• Location: Subdivision Name, Map Search or Elementary School

• Number of Stories: exact

• Exact number of rooms

• Square Footage Range: subject property sqft. +/- 10% (for subject properties 1000-4000 sqft.)

• Year Built Range: subject property year built +/- 5 years (do not include new built or under

construction homes if it doesn’t make sense to)

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Map Search

From the criteria screen, click the “Map Search” link or on the “Map” tab to include/exclude

specific mapped areas.

Map Search tools are located at the top right hand side of the screen.

Use the “Jump to Address” option to

locate the Subject Property.

• Click and drag the map or zoom in and out to your desired location.

• Use “Jump to Address” to quickly locate a specific map area.

Search by a specific location or point of interest.

• Use the “Layers” icon to choose which of the following layers to activate.

Click a section panel to expand

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• Using one or a combination of all three shape tools draw to isolate

as many areas on the map as you like. You can have a max. of 10 shapes.

• Clear all shapes by clicking the “Clear Shape” icon .

• When all areas on the map have been selected, you may choose to Delete,

Include or Exclude any area simply by hovering over the shapes red dot.

• View partial listing details by clicking on any listing marker icon Click on the

MLS# to view the full listing display. Use the checkbox to select a listing.

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The Quick CMA

The Quick CMA is a report that calculates the minimum, maximum and average sold price per sq. ft. and sold price, based on the properties you selected. This report can be printed, emailed or saved as a PDF. Add the Customer Showing Report and Multi-Map to the Quick CMA for a more complete look.

Use the “CMA” option under Actions, in the results screen, to pull your selected properties into the CMA Wizard. In the CMA Wizard you will be able to make adjustments to the sold comps

Quick CMA Customer Showing Report Multi-Map

Select Solds only when using the CMA Wizard

The CMA Wizard

Use the “CMA” option under Actions, in the results screen, to pull your selected properties into the CMA Wizard. In the CMA Wizard you will be able to make adjustments to the sold comps and set up a presentation with charts and graphs.

• Click on each tab, at the top of the screen to complete the CMA process.

• Use the Save icon to manually save.

• The system will perform an auto-save when you move to the next tab.

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Pages Select the pages you would like in your CMA presentation. You can also Upload Custom Pages and make a group of Selected Pages your default. To view the pages you must go to Finish.

Available Pages: click the “+” next to each category to see all page options. Click the page

name to move that page(s) to Selected Pages.

Selected Pages: use the up/down arrow to re-arrange pages and the “x” to delete.

Upload Custom Pages: upload static pages to the available pages selection. This will create a

category called “My Custom Pages.” Size Requirements: letter size 8.5x11” & 250KB max

Set as Default: make the page selection & order showing in the Selected Pages section your

default.

Restore Defaults: revert back to your Default after adding/removing/reordering your default

pages.

Clear: removes all pages form the Selected Pages section. Click “Restore Defaults” to restore

your list of default pages.

Subject Add the subject property details. Details listed in this screen will populate in the Adjustments screen and make the adjustments a smoother process.

• Type in the subject property fields manually: if the property has never been listed in the MLS.

• Enter a Cross Property MLS Number to auto-fill from: enter an MLS number to populate the subject property information.

• Search for a Cross Property listing to auto-fill from: search for a previous listing to populate the subject property information.

• Search for a Tax record to auto-fill from: search the Realist tax records to auto fill the subject property information.

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Tips

Use the Browse option under

Property Photo to upload a photo.

Upload clip art if you do not have

a photo of the actual property.

The Custom Fields will be added to

the Adjustments screen. The first

space under Custom Fields is for a

feature description the second

space is for dimensions or quantity

of the feature.

Subject Details

Add the subject property details. Details listed in this screen will populate in the Adjustments screen and make the adjustments a smoother process.

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1. Click the Locate link under Map Location.

2. Enter the subject property address in the Locate Address section.

3. Click Locate.

4. After the property has been pinned on the map click Done to save.

The Latitude & Longitude will populate in the Map Location section.

Manually Setting the Map Location The map location of the subject property can be manually set or corrected by using the “Locate” option at the bottom of the Subject Property screen.

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Cover

Add/Update cover page information and photos.

Subject Cover Photo: use the Browse link to upload a photo of the subject property from your

computer. Upload clip art if you do not have a photo of the actual property.

Agent Information: displays the CMA Cover Sheet information you have saved under Settings.

Use “Edit my information” to edit and save for all CMAs or “Override my information for this

CMA” to edit for this CMA cover sheet only.

Contact Information: enter the client’s information to be displayed on the CMA cover sheet.

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Comparables

This screen will be populated with the comparables you selected from the results screen. You

can add additional comps or delete comps from this screen.

Remove Selected: removes selected properties from your comparable list.

Search for Additional Comparables: directs you to a search screen where your CMA search criteria will be auto populated. Click Search to “Add Selected” properties to the comparables.

Add Comparables from Cart: the properties you are adding must already be in a Cart to add them to the comparables when using this option.

Print: select properties then click Print to choose what report page(s) to print.

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If you receive a Warning that the subject property could not be mapped, go to the

Subject screen and follow the instructions for Manually Setting the Map Location.

Map Shows how the subject property and comparables will be maped on the report. You can edit the location of the Subject Property only, by following the instructions for “Manually Setting the Map

Location.”

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Tips

Use the arrows at the bottom of the

Single Line Mode to scroll through

the adjustment columns.

If there is a message in red saying No

Data for one of the subject property

details, return to the Subject screen to

add the data.

Go to the Comparables screen to

delete a comparable property.

The detailed mode will display all of

the details and adjustments for an

individual property.

Detailed Mode

Adjustments Manually enter the pricing for adjustments in each column. Some columns provide a blanket adjustment option.

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Pricing Manually add the Suggested List Price or enter the minimum, maximum and average price per squate foot in the suggested list price section. The Notes section is intended for notes regarding the suggested list price.

Finish

Example of entering the price per square foot in the Suggested List Price field.

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View CMA: opens the CMA Report in a seprate window so you can view the report pages.

Email CMA: sends a Portal link to your client where they can access the CMA report.

Center for Specialized Realtor® Education: Pricing Strategies:

Mastering the CMA. NAR ® 2015

Tips

The CMA will be saved for 180 days from the Last

Date Modified.

If you would like to email the report after your

listing appointment, you can access it from the My

CMAs link under the My Matrix tab.