While the MLS (multiple listing service) makes comparable sales, or comps, easy to find, the usual grumble among agents is that a comparative market analysis (CMA) turns an agent into a data clerk, pulling sold listings and formatting grids in the evenings when that time could go to clients. A remote assistant can take that part. The agent still picks the comps, adjusts them and gives the price opinion.
Rules on who may give a client an opinion of value differ by state. California's Department of Real Estate, for one, says unlicensed assistants may not do anything that requires a license and need adequate supervision, so settle the split between data work and judgment before the first report.
Understanding Comparative Market Analysis
CMA support is a process in which a remote assistant pulls the comparable sales, lays the listings side by side and checks each record against county data while the agent is out with clients. This frees the agent to focus on what the numbers mean for one particular home.
The finished report goes out under the agent's name and license, so the agent signs off on every page.
Definition and Purpose
A CMA is a report prepared by an agent or broker that compares a home with recent local sales and current listings, on behalf of, or as advice to, a seller or a buyer. An appraisal is a different document, written by a licensed or certified appraiser and usually ordered by a lender.
Agents use a CMA to help a seller choose a list price, to help a buyer decide what to offer, and to check a price again when showings dry up. The price is the seller's call.
Key Components of a Comparative Market Analysis
Three things go into a CMA: the comparable homes, the state of the local market and the details of the subject home. The assistant collects all three, and the agent weighs them.
Comparable Properties
Comparables are homes like the subject that have sold, gone under contract or come on the market lately. Closed sales show what buyers paid. Active and pending listings show the competition a buyer will weigh against the subject, and expired or withdrawn listings show prices that did not bring a buyer.
Search rules come from the agent, and the assistant follows them to the letter. Say the agent asks for sales from the last six months within half a mile, in homes within 20 percent of the subject's living area. If that search turns up only two sales, the agent decides whether to widen the radius or the time window, and the assistant keeps track of the change in the report.
For each comp the assistant records the same fields and checks the ones that tend to go wrong:
| Data point | Where it comes from | What to check |
|---|---|---|
| Sale price and date | MLS closed data | Seller credits in the remarks, which lower what the seller received |
| Living area | MLS and county record | The two can differ, so note both and say which one the report uses |
| Bedrooms and baths | MLS, photos, floor plan | Whether the count matches the photos and the plan |
| Days on market | MLS | Whether the MLS restarts the count when a home is relisted, so read the history |
| Condition and updates | Photos, remarks, the agent's notes | The agent judges condition against the subject home |
| Lot and features | MLS and county record | Garage, pool, view and street, compared with the subject |
Dollar adjustments for differences, such as a garage a comp lacks or a kitchen the subject has updated, belong to the agent. That means the grid goes out with those columns blank.
Market Trends and Conditions
Comps show single sales. A market summary gives the big picture. For the same area and time window, the assistant can pull five measures from the MLS: months of supply, median days on market, the sale-to-list price ratio, new listings and homes going under contract.
Months of supply is the number of active listings divided by the number of homes sold each month. Say 60 homes are active and 20 sold last month: that is three months of supply. A low figure usually favors sellers and a high one favors buyers, and the agent looks at several months in a row before drawing a conclusion.
The assistant sticks to what the local data shows. Forecasts about where prices are heading stay with the agent.
Property Features and Upgrades
The subject home needs the same fields as the comps. The assistant collects them from the seller's intake form, the county record, the previous MLS listing and any permit records, including the dates of big updates such as a roof, a furnace or a kitchen.
Upgrades count for what local buyers will pay for them, and that figure varies from one neighborhood to the next. The agent walks the home and decides how much each feature adds. Anything the county record does not show, such as a finished basement or an addition, gets flagged for the agent to ask about, especially when the seller mentions it in passing.
How to Conduct a Comparative Market Analysis
The work follows the same order every time, so it can be written down once and handed off.
Steps and Methodology
For example, say you are getting ready for a Thursday listing appointment. To really work more efficiently, you can task your assistant with the search (i.e. pulling the sold, pending and active listings you specified), the data check, and then the first draft of the grid.
- Get the search rules from the agent: area, time window, property type and size range, plus the details of the subject home.
- Pull sold, pending, active and expired listings with those rules and save the MLS export.
- Make sure every record matches county data and the listing photos, and flag anything that looks off.
- Lay out the comps side by side with the adjustment columns blank, and add the market summary for the same area.
- Send the draft to the agent with a short note on every gap or doubt.
- Refresh the numbers the day before the appointment, because a new sale or a price cut can change the picture.
The agent then picks the few comps that match best, adjusts them and writes the price range.
Interpreting and Using the Results
The assistant's part ends when a checked draft reaches the agent. Reading the numbers belongs to the agent, because only the agent has seen the home and talked to the seller.
Applying the Data to Real Estate Decisions
For a listing, the agent uses the CMA to agree a price range with the seller and to compare the likely list price with the active homes a buyer will see next to it. When showings and feedback go quiet, the agent asks for a fresh CMA so the price gets checked against new sales and new competitors. Your assistant can set up a reminder to refresh the report at an interval you choose.
Buyers' agents use the same format to explain an asking price and to back an offer with sales. Investors use comps to estimate resale value, though repair costs make that a specialized job.
The agent presents the CMA as an opinion of likely value. No CMA guarantees what a home will sell for. Article 12 of the Code of Ethics of the National Association of REALTORS® requires members to be honest and truthful in their real estate communications and to present a true picture in their advertising, marketing and other representations.
Limitations and Considerations
A CMA can mislead when its data is thin, old or wrong. In fact, a report that says where its data is weak is easier to trust.
Factors that May Affect Results
Six things most often skew a CMA:
- Few close comps. Unusual homes, rural properties and new developments often have no near match, and the report should say so when that happens.
- Lag. A closed sale reflects a price agreed weeks earlier, so a fast-moving market shows up in closed sales late. Asking prices on active and pending homes can sit well above or below what buyers end up paying.
- Data errors. MLS fields are typed by people, so square footage and bedroom counts can be wrong. The county check in step 3 catches many of them.
- Condition and surroundings. Data cannot show deferred maintenance, noise, odors or a view. Only someone who has been in the home can judge them.
- Sales outside the MLS. A sale that never went through the MLS, such as a private sale between neighbors, will not appear in the data.
- Unusual sales. Foreclosures, estate sales and transfers between relatives can close above or below the going price, and the agent decides whether to include them.
No assistant should choose comps to reach a number the seller hopes to hear. The agent picks the comps first, and the price range follows from them.
Benefits of Using Comparative Market Analysis
Handing off the data work gives the agent back the hours that went into pulling and formatting it, and a fixed grid layout makes every report easy to read.
Advantages for Buyers and Sellers
Sellers get a price grounded in nearby sales, laid out so they can check the homes the agent chose and ask why others were left out. Buyers get a way to judge an asking price, since a buyer's agent can show what similar homes sold for and how long they took to sell, and that usually makes the offer easier to explain.
The buyers who show up set the final price, and the CMA gives everyone the same facts to start from.
Write down your search rules (area, time window, size range and property type) and hand them to your assistant with your next listing appointment. When the first draft comes back, go through it line by line and mark every field you would have chosen differently.