JUST WHAT IS A CMA?

When someone decides to sell their home and chooses a Realtor to list after some good research, there are a number of things to do prior to showing the home to the public for consumption. Most of the work includes a mound of paperwork (yes in a paperless environment) One of the documents presented would be called a CMA. That’s short for Comparative Market Analysis. And that is what exactly? It’s a document that shows where your house would sit compared to others that are currently listed or some that have sold OR some that haven’t sold due to overpricing, or a variety of other reasons. Thing is, you want to position yourself in the best possible place to effect a sale that satisfies your client. When the pandemic hit and people were spending like drunken sailors, CMAs were usually an afterthought. The seller would say this is what I want and a host of agents would just nod and agree because the spending spree was in full force. Then it wasn’t. And hasn’t been for four years, so agents actually have to step up and earn their commission. A huge part of that is establishing a price that makes sense to both buyer and seller. After all, that is the job of the Realtor. Find a deal that makes sense to both parties. The biggest step is the first one. Enter the CMA. If the agent is doing their job, they will find comparative properties that have sold recently. Bungalows to bungalows. Two-storeys to two-storeys and so on. In the direct area. With the number of sales that have happened in the last few years that should be fairly easy. Here’s where it gets funky. If something sold in 2020 for X amount of dollars, that really is NOT a comparable in 2025. The market has softened considerably. There are three sets of numbers that must be looked at. Mean, Median and Mode. Mean is the average price for all properties that have been sold in a certain area (don’t be comparing a sold in Toronto with a sold in Whitby) The Median is the middle number between the highest sold and lowest sold. The Mode is the number most often seen. This used to be easier because trends could be established and would carry for months, if not years. Not any more. Now the agent really needs to go a lot deeper. Look at the benefits of the home (number of beds, baths, etc) How accessible is the home to parks, schools, shopping and transit. Garage or no. How much parking? You can find many direct comparisons. That is when you look at what the overall drop is in average price. That needs to be configured into final list price. The big thing I deal with for clients (especially buyers) is the resale potential down the road. That can also be a huge selling point to buyers. If they know they are going to benefit in the long run they’ll seriously consider. Once all this data is rolled into a presentable document it goes to seller and they can decide what next steps they want to take. The more finite the details, the better the chance things will end on a good note. Feel free to check out this story and more on my blog site at: https://slackie14.wixsite.com/buy-sell-and-more