Pricing Strategies: Mastering the CMA

with Cynthia DeLuca

COURSE LEARNING GOAL

The goal of Pricing Strategies: Mastering the CMA is to help real estate professionals improve their skills in pricing residential properties, creating and presenting comparative marketing analyses (CMAs), explaining pricing recommendations, dispelling buyers’ and sellers’ misperceptions and anxieties about pricing strategies, keeping up to date with market developments, and working with appraisers.

LEARNING OBJECTIVES

1. CMA BUILDING BLOCKS

1. Identify the uses and benefits of CMAs for buyers, sellers, and agents.
2. Describe key market value concepts and industry standards that apply to the preparation of a CMA.
3. Comply with the REALTOR® Code of Ethics Articles and Standards of Practice regarding preparation of real property pricing opinions.

2. GETTING STARTED—SELECTING COMPARABLES

1. Identify and select appropriate comparables that are the most like and within acceptable proximity to the subject property based on commonly used standards.
2. Identify and access available sources of information on comparables.
3. Recognize and overcome challenges to selecting the best comparables.
   

3. COMBINING FACTS AND NUMBERS

1. Distinguish between cost- and market-based adjustment approaches and select the most appropriate approach.
2. Adjust the values of selected comparables to develop an estimated price range for the subject property and avoid common adjustment challenges and errors.
3. Develop a sales or offer price recommendation to present to the seller or buyer.

4. PREPARING THE CMA

1. Prepare a CMA document that and provides the level of detail and depth of analysis required by the buyer or seller.
2. Consider the impact of market area information including supply and demand and absorption rate on pricing recommendations.
3. Keep up to date on market developments that influence the value of properties by identifying and accessing reliable information sources.

5. PRESENTING THE CMA

4. Present the CMA to the buyer or seller and explain rationale for pricing recommendations.
5. Respond to and allay common misconceptions about price range and strategy.
6. Comply with standards for record retention and REALTOR® Code of Ethics Articles and Standards of Practice for maintaining client confidentiality.

6. WORKING WITH APPRAISERS

1. Describe the purpose and process of a property appraisal and the scope of the appraiser’s role.
2. Develop skills for working constructively with appraisers and clients through the appraisal process.
3. Review an appraisal report and take appropriate action when the report appears to contain inaccuracies.