5 Minute CMA

For internal use only

with Gabriel Perez, Keller Williams Realty Pasadena Team Leader

In a recent training session, Gabriel Perez emphasized the importance of mastering the Comparative Market Analysis (CMA) process to provide clients with timely and accurate property valuations. He encouraged agents to become proficient in conducting CMAs efficiently, stating, "Get it off of its pedestal... you should be able to say, give me 5 minutes and I'll get that for you." By practicing this skill, agents can confidently deliver quick and reliable market insights, enhancing their service quality and client trust.

How to Conduct a 5-Minute Comparative Market Analysis (CMA)

Purpose: Quickly estimate a property's market value using comparable sales data.

Steps:

1. Gather Property Information:

   • Obtain the property's address, number of bedrooms and bathrooms, square footage, and year built.

2. Check Public Estimates:

   • Visit Zillow to see the property's Zestimate.

   • Note: While not always accurate, this provides insight into the owner's perspective.

3. Verify Property Details:

   • Access your MLS's tax records (e.g., Realist) to confirm property specifics.

   • Ensure details like square footage and lot size match public records.

4. Set Up Your MLS Search:

   • Input the property's address to center your search.

   • Define a search radius (start with 1 mile; adjust as needed).

   • Filter for properties sold in the last 90 days.

   • Select single-family homes with the same number of bedrooms and bathrooms.

   • Set a square footage range (e.g., ±300 sq ft from the subject property).

5. Review Comparable Properties:

   • Examine photos and descriptions to assess condition and features.

   • Exclude outliers (e.g., properties with significantly larger lots or recent extensive renovations).

6. Calculate Average Price Per Square Foot:

   • Use the remaining comparables to determine the average sold price per square foot.

7. Estimate Property Value:

   • Multiply the subject property's square footage by the average price per square foot from your comparables.

Example:

• Subject Property: 3 beds, 2 baths, 1,606 sq ft

• Comparable Sales: Average sold price per sq ft: $869.81

• Estimated Value: 1,606 sq ft × $869.81/sq ft = $1,396,914

Tips:

• This quick CMA provides a ballpark figure. For listing purposes, conduct a more detailed analysis.

• Regular practice will improve your speed and accuracy in performing CMAs.

While this quick CMA isn't client-ready due to its simplicity, it's a valuable tool to promptly inform clients.

For instance, you might say, "Hey John, I wanted to get back to you quickly. I ran a quick report and found that your home is about 200 square feet larger than others sold recently, suggesting a value around $1.25 to $1.3 million. Of course, this depends on presentation and pricing." This five-minute CMA is efficient, whereas newer agents might spend half a day on similar tasks, often doubting themselves and getting stuck in the process.

By mastering this method, you can efficiently provide clients with timely market insights, enhancing your credibility and service quality.

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