Market Analysis By Jim Palmer Jr.

Brokers are often asked by property owners to prepare a Comparable Market Analysis (CMA).  Some of the reasons a property owner may want this information concerning the value of their property may include the need to settle an estate or divorce, for tax purposes, or because they are thinking about selling.  The process of valuing residential property is usually done by a Market Sales Approach, which is a comparison of the subject property to similar sold properties in the area.  In areas where there are not cookie cutter comparables, the adjustment calculation process can be difficult and time consuming. 

The time invested in this process is sometimes a burden for brokers, since they usually offer this service for free with the hope of securing a listing at some point in the future.  A troublesome dilemma for brokers is facing the anxiety of presenting their analysis to the property owner, since some owners have an inflated opinion of their property value and become angry when presented with an honest opinion of its value. 

One owner angrily referred to a broker’s analysis by using an expletive (similar to cow dung) because he did not trust their expertise.  He was offended because their opinion of value was considerably less than his. 
Another crabby individual called the broker a “bald faced liar” because his property later sold with a different broker for an amount that was greater than the value range they had suggested.  His accusation was based on the misguided viewpoint that a CMA is a statement of fact rather than an opinion of value. 

Another owner impatiently dismissed a broker during the analysis process, because they were taking too long.  It was a very unusual commercial property with no obvious comparables.  The broker was in the midst of completing a more detailed type of “income based” analysis when the owner gave them notice they had chosen another broker to do the listing.   

Regardless of good reputation or experience, many sellers list property with a broker simply because their opinion of value tops the competitors. As you analyze the opinion given by any broker, be honest with yourself, like you expect them to be honest with you!

Remember that the seller is in charge!  The broker may be offering an educated analysis of available data to help you understand the approximate value range, but they are not intending to impose their will concerning the list price.  They can always decline the listing if they think the seller’s expectations are unreasonable.