Lucy's Story - A CMA Learning Experience!

A few years ago a Realtor by the name of Lucy approached me in tears. I asked her what was going on and if I could help in any way. She said, I'd like to know what I did wrong! Without taking a breath, she shared her experience.... After many months of investing in marketing myself as a knowledgeable Realtor, she said, last night I finally had listing appointment. I prepared a fabulous CMA report, had my listing agreement ready, dressed for success and off I went to my appointment. When I got to the house, I was greeted by Larry, the homeowner who showed me around the house and led me to the kitchen area where we sat down. His wife Stacey, was sitting on the couch in the living room next to us. She was "watching" TV, but I could tell she was more into what was going on in the kitchen. Anyways, we started talking, I asked questions regarding the house, their needs and expectations and so forth. At some point I pulled out the CMA report and explained it thoroughly; the comps, the active listings, etc. Then I explained what I considered their house's fair market value to be and how much I suggest we list it for. At that precise point, Larry's face changed, he turned over to Stacey and said: Honey can you please bring here the other report? After they discussed who had touched it last and where it should be, "Honey" walks into the kitchen with a CMA report prepared by another Realtor reflecting a much higher estimated value compared to mine. Larry asked me "So why does this agent's report say we can sell the house for much more, based on houses that have sold nearby? I was handed the report and to my surprise, there were about 4 recently sold properties in the area, neither of which was on my CMA. I was devastated and speechless! I told Larry, I would like to review the facts on that report and get back to him. As I walked out the door, head down and brokenhearted, I heard "honey" telling her husband to hire the other Realtor that will get them "more money for their house". What happened? What did I do wrong? Lucy asked me again. I saw the report and in a split second I replied, did you use only the MLS to do the CMA? She nodded in agreement. Well that seems to be the issue. We ran a CMA using IMAPP and surely, there they were. All those "guilty" comps that had not showed up on Lucy's original report, but in her competitor's. "I don't understand", she said. "Very simple Lucy", I replied, "notice how in IMAPP you can see that some properties were sold with the help of Realtors and some others were sold directly by owners? The ones that were sold by owners, since they never "stepped foot" on the MLS will not show up on a CMA done from within the system. In this particular area where Larry's house is located, FSBO houses have a significant impact on the final estimated price and that's what affected your value estimation tremendously. Sorry you had to go thru this bitter experience to learn this lesson, which I am sure you'll never forget!" To everyone out there getting ready for a listing appointment, I hope you learn the valuable lesson in Lucy's story and decide to use a tax roll based program when doing a CMA. That doesn't mean we should only use these kind of programs, we can run CMA reports from the MLS, however it is advisable to double check with IMAPP or Realist to make sure numbers match. It could be the "make it or break it" of the next listing your get. Good luck!

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