Importance of Comparative Market Analysis (CMA)

It is critical that you perform a Comparative Market Analysis (CMA) when you sell or purchase a home. Why? To ensure the home is priced right. We are now in a tighter real estate market in which sellers cannot dictate price and terms any longer. Buyers are very cautious now, fearing a softening or even lowering of home prices.

Oregon's market has softened, but values continue to rise...although slowly. Other states, such as Florida, Arizona, and California, are in a real slump, with values falling 10-15% lower than last year. They had far too much new construction to handle the market in the past two years. Many sellers of existing homes felt they could continue to ask increasingly higher prices without regard for buyer sensitivity to the market. The result? A glut of homes for sale.

In any event, if a seller is too aggressive on price, buyers simply ignore the property. On the other hand, buyers want to ensure that they are not paying too much. A home market analysis helps both parties decide proper pricing.

In my book "Risk Hotline for Real Estate" (www.riskhotline.com) licensees stress the importance of "doing your homework." Your clients need it; mostly likely your company requires it. Definitely your real estate agency expects it.

Look at it this way, a CMA gives buyer and seller peace of mind that the selling/buying price is fair. It gives the listing and selling brokers peace of mind should the buyer or seller later claim the home was priced improperly. They have confirmation that this topic was covered thoroughly with their clients. Clients know that since the broker did perform this valuable service, they did not undersell or overpay.