CMA Final Quality Check – Agents Advantage Real Estate Academy

Under the office standard, each CMA passes through a final check before the seller sees it, and the check follows the same list each time. It is made by the person who prepared the analysis, on that analysis, and it takes a few minutes when the analysis is complete and longer when it is not. Its purpose is to find, before the presentation, anything a seller or a complaint would find later. Each item on the list corresponds to a way a CMA can be questioned.

How the check is made

The analysis is read in the order it was built, with the listing file open beside it: the subject against the file, each comparable against the selection criteria, each adjustment for direction, source and consistency across columns, the reconciliation and position against the adjusted prices and the tables, and the language last. An item that fails is marked and corrected at the step where it arose, and every step that depends on it is carried forward again, because a figure changed in the grid changes the reconciliation, the range and the position that follow from it, and the seller hears all of them.

The final checklist

A. The subject

The living area is taken from the best available record (the assessor’s card, the public record, the MLS listing, builder plans or a prior appraisal), and the source of the figure is stated; where sources disagree, the difference is noted, not guessed at.
The subject’s condition is documented in facts, and the comparables are described on the same terms.
Site, features, permits and any condition affecting marketability are recorded from the listing file and an inspection of the property.

B. The comparables

Every closed sale is within the subject’s competitive market area, where buyers of the subject would also look, and, under the method of search this course teaches, drawn from the subject’s own town, because a neighboring municipality has its own taxes, services and assessment, so its sales reflect that town’s market. A sale from another town appears only as the exception, because the property’s buyers would consider only properties of its own kind and the town has no sales of that kind that serve as good substitutes; the CMA notes which town it came from and why it was chosen, and the differences between the towns are taken into account.
Every closed sale is the same property type and similar in style when possible, close to the subject’s size (a difference beyond roughly 15 to 20 percent is a warning sign, not a limit), closed within the past twelve months with the most recent and most proximate similar sales relied on first (any older sale, used as support or as the best indicator, carries its reason), and between unrelated parties on the open market or labeled otherwise.
Every sale has been verified for terms, concessions and condition, and the source of the verification is noted.
Sales considered and set aside are listed with the reason for each, and no closer or more similar sale has been left off without one.
The sales were chosen for their similarity to the subject and not for the price they support.

C. The adjustments

Differences between the subject and the comparable sales are generally adjusted, except when the difference is too small to quantify or the sales show no market reaction to it.
Every adjustment is made to the comparable, in the right direction: a superior comparable is reduced, an inferior one is increased.
Every adjustment has a source beside it: paired sales, extraction from the segment, a measured market conditions rate, or a concession’s effect on price; no adjustment is an assumed figure.
The same difference is generally adjusted at the same rate in every column; where the rate differs, the analysis states why.
Net and gross adjustments are totaled for each column, and a column that needed far more correction than the others is either replaced or explained.
The comparables bracket the subject in price, size and condition, or the analysis states which side is unbracketed and why.

D. The reconciliation and the range

The adjusted prices are listed with the facts that bear on their reliability, and the spread is stated.
Any outlier has been investigated and either corrected, removed with the reason, or retained with little weight and the reason.
The weighting is stated in words and in figures, with the most similar sale carrying the most weight, followed by recency and verification, and the range follows from the weighting rather than from an average.
The conclusion is a price range, drawn from the adjusted prices and consistent with them, not an override of what they show.

E. The position

Pendings and actives appear in separate tables, with days to contract and days on market, and none of them has been used to establish the range.
The list price recommendation falls within the range, and the sentence beneath the tables states which sales established the range and which listings positioned the price.
The segment’s months of inventory and trend are recorded, and the position is consistent with them.
The checkpoint dates and the measurements to be read at each are stated.

F. The language

The word “value” does not appear as a description of the analysis or its result; the analysis states a price range, a pricing position and a list price recommendation.
No price, range or value is expressed as a price per square foot; adjustment rates per square foot are stated as rates.
No place is described in terms that rank neighborhoods or describe buyers; a location distinction is stated as superior or inferior in marketability.
Every number in the analysis can be explained in plain language the seller can follow.

G. Completion

Checked by: ______________________ Date: __________
Items corrected: ______________________________________

The final question

One further question closes the check: can every sale, every adjustment and the range be traced to its source? Every sale in the grid and on the set-aside list carries the reason it is there, every adjustment carries the pair, extraction or measured rate that produced it, and the range follows from the weighted indicators by arithmetic the file shows. A CMA that satisfies the checklist above answers yes at every point, and an analysis that answers yes can be explained line by line to the seller today and to anyone who reads the file later, without its preparer in the room.

Application

The final check is run on a CMA for a 1,900-square-foot ranch. Sections A and B pass. In Section C, the condition adjustment is $12,000 in one column and $18,000 in another for the same excellent-to-good difference, and the analysis does not say why. In Section D, the range is stated as $415,000 to $425,000 while the weighted figure and the most similar sale both sit near $412,000; the range has been raised toward the highest indicator without a stated reason. In Section F, the summary reads “estimated market value.” Three items are marked and corrected. The revised version, with a single condition rate, a range of $408,000 to $418,000 and a conclusion stated as a price range, is ready for the seller the same afternoon.

Summary

The final checklist reads a CMA in the order it was built: the subject against the file, the comparables against the selection criteria and the set-aside list, the adjustments for direction, source and consistency with net and gross totals and bracketing, the reconciliation for its weighting and the range that follows from it, the position for its separate tables and its sentence, and the language for the words the office reserves. An item that fails is corrected at the step where it arose, and the steps that depend on it are carried forward, because the seller hears every figure that follows. A CMA that passes can be traced, sale by sale and adjustment by adjustment, to the sources the file shows.