CMA Problems

A comparative market analysis (CMA) estimates a home's price based on recently sold, similar properties in the immediate area.

Here are three typical problems brokers encounter when preparing a CMA.

1. Finding recently closed data. Unlike in the US, no data is readily available to the public. (The Department of Finance's proposed Real Property Valuation Reform will later solve this problem.)

2. The second problem is that preparing CMA takes time. How many data points are needed? Does the advertised unit online come with parking? Answering these questions would take a few hours to a few days. While you're doing your study, other brokers are already marketing the property.

3. Clients still stick to the price they want after doing all the work.

4. The analysis might be wrong. We always decide with a limited amount of information. Thus, there's no such thing as 100% sure.

Solutions to these problems:

Problem 1: Unavailable Data

Know which brokers focus in the area and befriend them. For an introvert like me, I now realize that this is one of the reasons why brokers attend socials.

Problem 2: Takes Time

It's impossible to develop a CMA for all parts of the city. I know. I've tried this. Come up with a place you want to specialize in: a farm. Make it small enough that it's easy to continuously collect data on done deals, new listings, and all developments on that farm. Once you've created this database, you could recycle the data for other clients. You could also trade your database with other brokers for properties outside your farm.

Problems 3 and 4: Owners don't agree with your analysis, or your analysis might be wrong

Time will tell whether your analysis is correct. Therefore, it is imperative that you continue the process by consistently updating your clients with price movements and trends. It always helps to present a plan to the client to lower the advertised price if you are still waiting for inquiries.