Completing a Market Analysis - CMA

(Includes Absorption Rate Calculation)

*Below are videos that covers the below steps*

CMA using MLSPinergy

CMA using SmartMLS

1. Pull old Listing from MLS (use tools property history to do so) to get the info about the property.. If no old listing use public record to get info

2. Call client and confirm info on sheet .

Make sure to ask about garage spaces and finished basement area as that info is not listed in public record
Then ask about any upgrades in past 10 years. Start on exterior (i.e. Windows,siding,roof) then move inside ( i.e. Kitchen, baths, floors central air fresh paint, furnace etc )

3. Search the street your listing is on and any other streets in immediate neighborhood (i.e. Any adjoining or very close streets) and go back 24 months and see if there is anything remotely comparable that you can use

4. Then use MLS map search to look for anything similar in a .5 to 1 mile radius (use criteria 5.1 to 5.6 below for last 12 months)

5. If still no good comparables, use the following criteria to establish comps in the same town (you can always broaden or narrow your search)

Same town (if large town you could narrow down to sections). If Springfield you must go by zip code
Square footage (plus or minus 15%)
Bedrooms (If you have 2 go with 2, If you have 3 beds you could go 3-4, if you have 4 beds search 3-5)
Style - Ideally you would always like to be comparing similar styles (ie ranch to ranch and cape to cape). At a minimum, make sure you are comparing the same number of levels. If you have 2 levels compare to other 2 level properties and if you have 1 compare to 1.
Garage - If you don't have one try to stick with properties that don't have one, if you have 1 compare to 1+, if you have 2 try to compare to 2+ (but 1-2 could work)
Baths - If you have 1 search 1.5 or less, if you have 1.5 search 1-2, if you have 2 search 1.5+)

6. Ideally you are looking for 3-4 good sold comps (if you have more narrow your search, if you have less broaden your search)

7. Find out real sale price of each property by removing any closing costs

8.Understand $/SF for the comparables - To find out how much a property sold for per square foot simply take the Sale Price and divide by the square footage. So if a house sold for $333,000 and its 2100 square feet it sold for $158.57 per square foot. When doing these calculations only use the above grade square footage. If you have a nice finished basement I would remove that from the sale price before calculating the $/Sf. Ie if the house that sold for $333,000 had a nice finished basement I might reduce the sale price by $15,000 to $318,000 and calculate the $/sf at $151/sf. Knowing what a property sold for per square foot allows you to compare properties of differing size.

9. Use the same search to pull actives so you know what your competition is.

10. Go to Tools, Market Reports, New Report, report type select “area market survey”, pick your property type (sf, condo, multi), select timeframe past 1 months, select your town and print a pdf of the results. Repeat for past 12 months.

11. Find out the absorption rate for that price point or specific type of property like waterfront. There are two methods

Current Market Absorption Rate
- - Find out how many are for sale now with similar criteria
  - Find out how many went pending in the last 30 days with similar criteria
  - Then use the following equation Absorption rate = number of homes for sale now/ number of homes that went pending in the last 30 days
  - Please note that a normal market is 6 months of inventory. If we have less than 6 months its a sellers market and if we have more than 6 months its a buyers market.
Average Absorption Rate for the past year
- - Find out how many are for sale now with similar criteria
  - Find out how many SOLD in the past 12 months with similar criteria
  - Divide that number by 12 to get the average number of homes sold per month
  - Then use the following equation Absorption rate = number of homes for sale now/ Avg number of homes sold per month