Market Analysis and Comparative Market Analysis (CMA) Flashcards
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Read the first 6 Market Analysis and Comparative Market Analysis (CMA) flashcards as text
What is the purpose of presenting a CMA in a listing presentation?
Answer: To educate the seller on market conditions and support a recommended pricing strategy with data
The CMA establishes the agent's expertise and helps the seller understand the market's pricing reality, making the listing price conversation data-driven rather than emotional.
What does a 'list price to sales price ratio' above 100% indicate in a market report?
Answer: Buyers are consistently offering and paying more than the asking price
A list-to-sale ratio above 100% shows a competitive seller's market where buyers are frequently bidding over asking price to win properties.
Which factor is most likely to require a significant upward adjustment when comparing a comp to a subject property in a CMA?
Answer: The comparable sold 12 months ago in a market with 10% annual appreciation
Time adjustments for market appreciation are critical; a comparable from 12 months ago at 10% annual appreciation may be significantly below current market value.
What is a 'pocket listing' and what are its potential disadvantages for a seller?
Answer: A listing sold exclusively through referrals without MLS exposure, potentially reducing competition and the final sale price
Pocket listings bypass the MLS, limiting buyer exposure, which typically reduces competition and may result in a lower sale price than a fully marketed listing.
How does a CRS agent use expired listings in a CMA to counsel a seller?
Answer: They represent the price ceiling the market rejected, helping set realistic upper-limit pricing expectations
Expired listings show prices buyers consistently refused to pay, providing a clear price ceiling and helping the seller understand where the market draws the line.
What is seasonal price variation and how should it affect a CMA prepared in January for a US residential market?
Answer: Spring and summer typically see higher demand and prices; a January CMA should account for potential seasonal appreciation by spring
Most US residential markets experience higher demand and prices in spring/summer; a CMA prepared in January should note this trend when projecting likely sale prices during the anticipated listing period.
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