Preparing a Comparative Market Analysis
Course Objectives: o To be able to determine Market Value of the Home o How to look up comparable properties o How to choose which comparable properties to use o When to and not to make adjustments to the value Field Work: o Prepare a CMA to presented to the instructor
What is a Comparable Market Analysis (CMA)? 1. A written CMA compares three different types of comparable homes in the neighborhood to the subject property, which are: a) Currently listed b) Currently under Contract c) Have sold in the last six months. 2. Comparable properties should be pulled from the subdivision first, then by like subdivisions in area, then by radius from subject property. 3. Comparable properties should be similar in square footage, age, bedrooms baths, amenities, etc.
How to look up Comparable Properties Step One: Go to http://www.ntreis.net and click NTREIS Listings
Step Two: Log in using your user name & password
Step Three: A.) Pull Tax Information. Verify Ownership, square footage, value, and year built by clicking on the Tax tab.
B.) Go to the Searches tab and select address option (or street or Owner s name if you don t have address)
C.) Enter address you wish to use for your CMA and click search.
D.) Print out tax information, then X out of screen. Click here to X out of screen
Step Four: A.) Pull multi-list activity Actives, Pendings, Solds, Expireds & Off Markets for the last year to compare trends. B.) Click Search Tab, then quick search, then residential.
C.) Enter all of your search criteria highlight status (actives, etc.), Type Area #, # Bedrooms, # Baths, Square Footage Range, & Subdivision to start with, then click the search tab. You may have to change info. to get more properties or less properties to come up in the search example maybe take out the subdivision & put in a Mapsco page & coordinate.
D.) Check all listings and scroll down on report functions to select CMA report.
E.) This is your CMA Report.
Overview in Preparing a CMA Step One: Pull Tax information to verify ownership, Square Footage, Value, and Year Built Step Two: Pull Multi-List Activity Report Actives, Pendings, Sold, Expireds & Off the Markets for the last year to compare trends. Step Three: You can then look at Solds within the last 6-8 months. Search neighborhood first, city second, then closest neighborhood in the next city with same criteria, or closest mapsco. Step Four: Look at the actives. Show all actives in an area, same city, then Mapsco. Find the ones closest in size, within 400 sq. ft. but no more than 20% of square footage, features and area. Pull MLS sheets for actives and solds to compare amenities. Look at normals, not highs and lows. Try to compare like comparables to like comparables.
Overview in Preparing a CMA cont. Step Five: Figure a Market Value Range. Reduce to a price per square foot. Be aware of the variance of List to Sell and the time frame, days on market to have them sell. Step Six: Update the CMA every week while the home is on the market. Be sure to look at the area every week for updates on Solds and Actives. Update the CMA at least every 30 days for the seller.
Location- Size- Add-Ons- Age- Factors Affecting the Comparative Market Analysis Location is affected by backing up to businesses, on a major street, any hazard that would affect value. (noise 5-7%) Example-high power lines, water towers, apartment building backing to house Houses should not vary more than 400 square feet of appraisal property or 20% of total square footage. 1.) Enclosed patio, even heated or cooled, will bring 25% of the square footage value 2.)If it is from the original foundation then 50% and 3.) If the porches, whether they are screened-in or glassed, only 15% of square footage value. The appraisers try to appraise within 5 years in age, and preferable in the same neighborhood. If they cannot find something in the same neighborhood, they will try to stay within 5 mile radius preferably in the same city or school district. *Do not compare new construction to pre-owned. Sometimes you find a fairly new subdivision with no comps., this is where he will have to go into another subdivision within the 5 mile radius. Try to make sure they are new, in the same city, and same school district if possible.
Factors Affecting the Comparative Market Analysis cont. Condition- Estimate costs of repairs or improvements that would make the comparable equal in condition to other properties in the area. Some of the conditions are, for example, odors (pet, chemicals, smoke, cooking, and medical), clutter, drive up appeal, and cleanliness. What can you help do to get the home sold? Other Things That Will Affect Price Baths- Garage- Garage Conv.- Fences- Exterior- 1 full bath, ½ bath Single car, double carport When comparing these try to compare to other garage conversions. If the addition square feet is from a garage conversion, the owner will have a hard time getting it sold. The appraiser will likely give $5,000 for the addition, then deduct $10,000 for the loss of the garage. Marketing skills are needed on this, see manager. You may want to offer property with garage being reconverted at seller s expense. Stockade, Chain Link Brick, frame
HVAC- Fireplace- Kitchen Equip.- Central Heat, Central Air Wood-Burning, Decorative, Other dishwasher, disposal, range, built-ins, microwave, trash compactor, countertops Sprinkler System- Front, Back (depending on size) Pools- Covered Patio- Draperies- Finish Out- Extras- Acreage- Other Things That Will Affect Price cont. Depends on type, age, normal for neighborhood, above ground, vinyl, gunite. Small, large, or none Custom draperies Tile, granite, wood floors, tumbled marble, travertine, faux finishes Storage buildings, storm cellars, gas grills, decks, fans, wall finishes, storm windows, upgraded light fixtures, electric garage door opener, mirrors, doors, moldings, etc. Ask the property owner to help you price these extras. Allow for depreciation do not use new prices. Extras may help a property sell but doesn t get you doallr to dollar spent usually not more than 10%. Valued by city, lot size and use. Where does house sit on land, can it be subdivided?
Market Conditions Addendum (Form 1004MC)