CMA Lost in Translation

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Dear Sue,

I have been thinking about selling a home that I have owned for over thirty years.

I called a real estate agent that has been working in my neighborhood. I told her that I wanted to know how much my home was worth. She told me that she had to do a CMA.

I didn’t want to appear clueless but what in the heck is a CMA?

Clueless Cal

Dear Cal,

AVID, CMA, SFR, SFD, RPA, BPO, REO, CRS, GRI, are “short cuts” or abbreviations for terms that real estate agents unwittingly throw around AKA “words of the trade.”

When Realtors use abbreviations like these they make others feel like outsiders and clueless. I am in the real estate business and sometimes even I am forced to stop agents and ask them to translate!

In my opinion it’s important to use language that your audience understands when communicating. Otherwise, what is the point?

Back to your question, a CMA is also known as a comparative market analysis. It is the process of determining market value by comparing a property with comparable or similar properties that are currently on the market, pending, sold and expired.

The properties that are used as comparisons should ideally be of similar location, condition, size and age. The comparables should also be of similar quality.

If there are no similar properties with which to compare, it becomes more complicated to give an accurate market analysis. An agent familiar with the market area can extrapolate by making adjustments to compensate for differences. An easy example: your home has a pool with a water- fall and professional landscaping. If there’s a similar home in your market area without a pool or landscaping, an adjustment of X dollars can be added to your home’s value.

The more different the available properties are from each other, the more market knowledge and skill is required. My first Broker, Bill Bertrando once said that a home in Watts could be compared to a home in Auburn if one could determine the differential.

When your Realtor tells you that she must prepare a CMA she is going to prepare a comparative market analysis. Ask her not to use crazy Realtor speak in future conversations! Tell her it’s a matter of good Home $$’s and Sense.