How good is your CMA?
With the shortages of inventory reported here week after week, more and more agents are advertising free Comparable Market Analyses in an effort to garner more personal inventory. This marketing strategy has always been used by some. Judging from the emails sent daily within our agent network it is easy to see the desperation that comes from the lack of available houses currently listed in the Multiple Listing Service (MLS) and more agents are resorting to offering this free service.
Some agents have equipped their sites with Automated Valuation Models or calculators that purport to estimate the value of your home. Typically, registration is required so that the agent can capture your name and address to pursue you in attempt to list your home. This is all well and good and nobody is fooled but the tactic can be a disappointment to a homeowner when the agent actually visits the home and determines what a calculator cannot – the condition and marketability of the home.
You do not need to register on an agent’s website to use an AVM to estimate value. You can go to any number of nationally known websites that host these calculators. These can be even more misleading since these sites exist to generate income from agents who pay for positioning there. The problem is that these sites do not have sufficient data to generate good estimates of property values in Idaho. You see Idaho is a “non-disclosure” state meaning that sold prices of properties may not be disclosed except to Realtors who report that information to their MLS. We then use that information to report the trends you read here and to allow our members to do an accurate evaluation for buyers and sellers of real estate.
These CMAs, generated by our members for you, can be achieved with a few keystrokes in a matter of minutes by any neophyte member of the MLS. There is no substitute though for a boots on the ground analysis that comes from truly understanding the market, the neighborhood and the subject. This of course requires a personal visit to the property. An AVM does not require disclosure of defects nor can it automatically adjust for amenities atypical to your neighborhood. A agent’s visit may quickly ascertain that the proximity of your home to a recent mudslide or the 118 stairs to your front door will have an impact on your home’s value. These characteristics can be calculated by adding adjustments to yours and the properties it is being compared to with some effort on behalf of the person performing the analysis. Once these additions or subtractions are made to yours and the other homes within the analysis your agent can better predict the selling price of your property.
With the sellers’ market we find today in many price ranges your agent may want to temper this analysis with a little common sense. Rather than relying on the default searches that look for sales over the last year, perhaps your CMA should only reflect activity over the last three months. What happened a year ago may no longer have any relevance when buyers are having a very difficult time finding homes to buy. If your are in that sellers’ sweet spot where there is only a three month supply and you’re not in a hurry to sell your agent may advise you to list at the higher end of the recommended price range since there is little competition and statistics show prices still rising.
Unlike a McDonald’s where kiosks are replacing people to take orders or big box stores with self checkout kiosks your real estate needs the personal touch of a human being with an understanding of your property and its competition or your CMA is not worth the paper it isn’t written on.