Introduction to CMA
If you’ve sold a property at any time in the last 5 years or so, you’ve probably heard your real estate agent use the term ‘comparative market analysis’. Or more likely, your agent has referred to CMA as a safeguard that the price you’re being quoted is more or less realistic in terms of what you and your agent can achieve when you list your property for sale.
The phrase is not new, it’s simply become a function that was introduced under regulatory control by state governments seeking further protections for consumers from rogue real estate agents who over-promised on price, but eventually produced under-whelming results.
Comparative market analysis is simple. So why the confusion?
How it works
Real estate agents login to any one of a few property and market research portals, enter your address, add a few property-specific parameters, such as land size, number of bedrooms and bathrooms, and car accommodation. And voila! A neat and tidy report pops up with properties currently on the market for sale, those recently sold, and a few interesting snippets (trends) unique to your suburb.
The agent’s narrative
Here’s where it gets interesting. The comparative market analysis report is rarely, if ever, provide to a seller without a tweak or two. The report must be filtered or creatively edited to fit your agent’s narrative, but more importantly, to manage or control your expectations. Ouch!
From the get go, your agent already has a good idea (read guesstimate) of what your property is worth on today’s market, without the report. Your agent possesses sufficient relevant and frequent intel sourced from the same research organisations who provide the raw data, on what’s selling and what’s not, and what properties are fetching on the market.
Why have a CMA
So why do agents bother with comparative market analysis? Because government agencies and consumer bodies insist they do. In fact, there are severe penalties for agents who do not. The report itself, like the regulation, is flawed, but it does give consumers a warm fuzzy feeling and perhaps the perception of transparency. Maybe. Maybe not.
Order your CMA report
If you’re thinking of selling your home or investment property, and you’re engaging an agent to give you the data on your property, other properties for sale or sold, and the local market, insist on a comparative market analysis in its raw form. Or better still, order your own CMA from RPData CoreLogic – Australia’s only independent property research and data analysis organisation. Order your report at CoreLogic — it’s $40, or free when you subscribe here.