Tempo CMA Price it Right Manual

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  • 1. CMA - Price It Right Course Manual Presented by Marilyn Maxwell The Houston Association of Realtors® Course # 02-00-011-7651 Updated: February 2009CMA - Price It Right Page - 1 -The Houston Association of REALTORS®
  • 2. CMA - Price It Right Table of ContentsOverviewChapter 1 Subject Property Information .......................... Page 4Chapter 2 Selecting Comps ............................................. Page 6Chapter 3 Property Archive Records ................................ Page 8Chapter 4 Mapping ........................................................... Page 9Chapter 5 CMA Reports ................................................... Page 11Chapter 6 Statistics .......................................................... Page 13Chapter 7 Financial Reports ............................................. Page 16Chapter 8 Custom Search/Custom Hot Sheet................... Page 17Chapter 9 "Just Listed" Labels ......................................... Page 20Chapter 10 Tempo CMA Checklist of Possibilities ............. Page 21CMA - Price It Right Page - 2 -The Houston Association of REALTORS®
  • 3. OVERVIEWCMA stands for Comparative Market Analysis. These reports are designed to show a propertysvalue based on other like properties that have recently sold. CMAs are designed to give anoverview of facts such as approximate square footage, number of bedrooms and baths, roomsizes, location and amenities such as fireplaces and pools.Many times a CMA may include homes that are currently for sale to show what the existingcompetition is. Most of the calculated numerical values, such as price per square foot, will bederived from properties that have sold within approximately the past six months.Generating an accurate CMA is not a science because it is also subject to perception as to thecondition and appeal of the home. What has great appeal to one person may not be important toanother.Remind the seller that you are not an appraiser; you are there to give a suggested list price basedon a combination of facts and perception.A CMA can also be generated for buyers who want to know the value of a home before making anoffer on it. For legal purposes, it is recommended you have a Buyers Agency Agreement signedbefore running a CMA for buyers.One Step or Two Step CMAA One Step CMA is only one visit to the home. Here, you will not only present your marketingplans, but also the results of your Market Analysis. Since you would not be familiar with the home,most of your analysis is dependant upon the information given by the seller. You are dependentupon their facts and perception.A Two Step CMA means that you are planning on making two trips to the home. During the firstvisit, you are presenting the seller with your marketing plan, taking room measurements andgathering your own facts and perceptions about the property. Always take a copy of the MLS DataInput Sheet with you to fill out as you view the property. Then you can go back to the computerand generate a more accurate analysis of the home to present to the seller on the second visit.CMA - Price It Right Page - 3 -The Houston Association of REALTORS®
  • 4. CHAPTER 1SUBJECT PROPERTY INFORMATIONThere are different sources available when gathering information about the subject property: (1) Tax Records (2) The homeowner (and/or tenant when applicable) (3) Previous MLS entries.(1) Tax RecordsUsing the Tax Search will help you gain immediate information about the subject property. You willneed to verify this information with the prospective seller, especially the square footage asrecorded. Also note any improvements that have been made to the property.Information from the Tax Records includes:Improved SqFt: 1683Built: 1955Bedrooms: 3Baths: 2Stories: 1Pool: NoLand Sq Ft: 8,400CMA - Price It Right Page - 4 -The Houston Association of REALTORS®
  • 5. Additional Reports in Tax RecordsIn addition to the Property Profile, the following reports are also available from Tempo Tax: Thesecan be accessed from the Property Profile once a particular address is being viewed. a. Taxes b. Schools c. Deed History d. Demographics e. Subdivisions f. Recent Sales g. Neighborhoods h. SketchIf the Property has been geocoded, a Radius Search button will also be displayed. This featuregives you the ability to search within a defined distance from the property. It is a great tool to usebecause both MLS and non-MLS closed properties can be found.The Radius Search button can also be used to generate mailing labels for Just Listed and Just SoldCards. (See Chapter 9)(2) The homeowner:There is other information you will want to gather as you talk with the seller. These questions willinclude:1. Any room additions to the home2. Upgrades such as paint, AC or carpet3. Condition of home, any defects such as foundation problems or termites4. Location of the home, cul-de-sac or on a busy street5. Major insurance claims such as flooding6. Special Financing of the new loanThe amount of information gathered from the homeowner may depend on whether you plan to do aOne Step CMA or a Two Step CMA.(3) Previous MLS entries can give you a lot of helpful information, but caution needs to be takenwhen relying on the input of someone else. Also keep in mind, the condition of the home may havechanged since it was last entered in MLS. In any case, you need to take your own pictures androom measurements for your MLS entry.CMA - Price It Right Page - 5 -The Houston Association of REALTORS®
  • 6. CHAPTER 2SELECTING COMPSSelecting your comps is the most time consuming and important part of the market analysis.Appraisers generally want at least three properties that have sold within the past six months in nearproximity of the subject property.You will also want to include: (1) Three or four Active Properties to show what the competition is at that given time (2) Any Pending Properties to show what "like houses" are actually selling.When filling in search criteria, be careful not to put in too much information. For example, if thesubject has a two car garage, you might not want to eliminate an otherwise good comp because ofthe garage. There is no exact science. In the case of the home on Tonawanda, the followingcriteria might be entered:Subdivision: WillowbendSqFt: 1400 - 1900Year Built: 1950 - 1960Bedrooms: 3Closed Date: 6/1/04At this point, baths could be left out of the equation to see results thus far.CMA - Price It Right Page - 6 -The Houston Association of REALTORS®
  • 7. Narrowing the comps depends on how many properties are generated on the search return. Ifthere are a lot of properties to choose from, then you can narrow the search. If there are not getenough properties, then broaden the search criteria.Once you are reviewing a property for selection, you will want to consider the following from theavailable MLS data :Agent Remarks - Private: This section will reveal the general condition of the home and whatupdates, if any have been made. You would not want to compare an "as-is" home with a subjectthat has had many upgrades. Public Remarks can also contain helpful additional information.Pool: You do not want to use a comparable property with a pool against a subject that does nothave a pool unless you have to. Adjustments can be made later as needed for such amenities.Lot Description: Important considerations here are Golf Course and Waterfront or Waterviewproperties which would significantly increase the value.Financing: Make sure the comparable property is not an "as-is" or Foreclosure property. Youwant to compare "apples to apples" even in financing where possible.After all the comparables have been selected, be sure to print full reports of each property toinclude in the CMA.NOTES:CMA - Price It Right Page - 7 -The Houston Association of REALTORS®
  • 8. CHAPTER 3PROPERTY ARCHIVE RECORDSMLS properties in TEMPO are archived for a period of at least five years. Reviewing the history ofa property can reveal helpful information such as: a. The true days on market. For example, current days on the market might indicate six days. But the property could have been listed with a different broker for six months prior to the current listing period. The true days on the market would then be 186 days. b. Price reductions. The Property Archive can track the original price of a property to its current price. Most properties have price reductions, occasionally there are price increases especially if a seller has made improvements to a property. This information could be helpful in determining the price of a subject property. A listing could have been priced at $189,900 four months ago and has now dropped to $169,000. That particular seller has lost tow months of marketing time by being overpriced to begin with. c. Status changes. This history can provide valuable information through displaying the different statuses of a property over a certain time period. It is important to pay particular attention to the number of times a property has been withdrawn and terminated during recent listing periods. Multiple withdrawns might indicate possible problems with a seller who is not sure what they want to do.The PAR (Property Archive Record) can be access through the single line results (click the Y in thePAR column) or in the detail view of a property. (click the Y next to the PAR field label).The easiest way to read the PAR is from the bottom up. The property below was originally listed at$195,000; reduced ultimately to $177,000; terminated; relisted at $177,000 and finally closed at$168,000. The true DOM (days on market) would begin at the first listing in 05/10/2004 andcontinue until the closing on 12/07/2004.CMA - Price It Right Page - 8 -The Houston Association of REALTORS®
  • 9. CHAPTER 4MAPPING Mapping can help in the final selection of comps, especially if you are not familiar with an area. Below is a good example. Before continuing with the CMA, select the MAP button under Available Reports for all selected properties. Note that two of the properties are south of a major street called Willowbend. Another search might be made to find comps that are on the same side of Willowbend as the subject property.CMA - Price It Right Page - 9 -The Houston Association of REALTORS®
  • 10. Printing the MapOnce the final selection has been made, click the Print button in the upper right corner of thepage……to generate the following pages:Fill in the blanks you wish to, check the boxes and then click Create Print Page button to get theprintable page shown below.CMA - Price It Right Page - 10 -The Houston Association of REALTORS®
  • 11. CHAPTER 5CMA REPORTSTempo offers two selections of CMA Reports.(1) The CMA Report listed under the available reports generates a nice, one page report. Keep in mind that it does not allow for adjustments between properties such as closing cost or points paid by the seller.(2) The CMA Wizard features more property details and allows for adjustments. Additional advantages are: • Days on Market can be adjusted from Property Archive data. • Adjustments can be made on each property. • Adjustments are made by equalizing the comparable properties to the subject property. • Comments can be entered for each property. • Pictures are displayed on each listing. • The CMA is saved and can be edited later. • CMAs are saved under My Page on the Tempo navigation bar.CMA - Price It Right Page - 11 -The Houston Association of REALTORS®
  • 12. CHAPTER 6STATISTICSThere are three main statistical reports that can be generated to supplement the CMA. (1) Neighborhood Statistics (2) Area Statistics (3) Months of Inventory(1) Neighborhood statistics are generated from Quick Search by filling in the following criteria and selecting Statistics instead of Search. a. Define the geographic area such as Subdivision. In this case, Willowbend is the Subdivision. b. Select Active, Pending and Sold from the Status field. c. Enter a date (one year back recommended) in the closed date field. d. Select Statistics(2) Area Statistics a. Select Reports from the Tempo Navigation Bar b. Select Statistics c. Fill in the Area, Property Type and desired time period. d. Select Year to Date (or View Month) to view report.CMA - Price It Right Page - 12 -The Houston Association of REALTORS®
  • 13. (2) cont. Reading the Area Statistics ReportNew: The number of listings taken in Area 17 in the year 2004. 2043Pending: The number of listings pended last year no matter when they were listed. A listing could have been taken in 2003 and Pended in Jan 2004 and counted in this period. 1258Closed: The number of listings closed last year, no matter when they were listed or pended. 1247%CP/LP: The ratio of Closed Price to List Price: List Price is the price at the time of the sale, not the original list price. 96.72% Homes listed at $100,000 were selling at approximately 97% of the list price, or approximately. $97,000DOM: The average Days on the Market 80CMA - Price It Right Page - 13 -The Houston Association of REALTORS®
  • 14. (3) Months of Inventory Also included under Reports and Statistics are calculations for Months of Inventory which indicate the average turn around time of existing inventory of a defined area based on the past twelve months of sales.After running the report, data indicates it would take an average of 4.9 months to turn over theexisting inventory of 17 homes. That is good news for a seller.CMA - Price It Right Page - 14 -The Houston Association of REALTORS®
  • 15. Chapter 7Financial ReportsTempo offers the ability to generate Financial Reports for both sellers and buyers. For additionalhelp with these reports, click the (?) question mark on the black navigation bar. (1) Sellers Net Sheet. Fill out form and press Calculate to generate report. Default values are based on current Title Company data and can be overwritten. (2) Buyers Closing Cost. These reports can be printed and accompanied with flyers in the home for prospective buyers. (3) Amortization Schedule. (4) Rent VS Buy. This report can be valuable when a home is listed for Rent and Sale.CMA - Price It Right Page - 15 -The Houston Association of REALTORS®
  • 16. Chapter 8Custom Search - Custom Hot SheetBy creating a Custom Search, you can generate a Days Back Report. This report will give you abirds-eye view of all of the activity in that subdivision for the past thirty days or less. It makes anexcellent report to accompany the CMA.To generate this report: a. Click on Report b. Click on Hot Sheets c. Click on Custom Hot Sheets d. Select the desired Custom Search from the list e. Enter the time period (up to 30 days) for the report f. Click CalculateThe following report will be generated. Note the breakdowns of New Listings, Price Changes,Pending, Closed, Withdrawn, Expired and Terminated.All you need in the Custom Search Criteria is: (1) the Subdivision (or geographic area) (2) Closed Date so that you do not get several years worth of solds the first time you run the report.CMA - Price It Right Page - 16 -The Houston Association of REALTORS®
  • 17. CHAPTER 9"Just Listed" LabelsNow that you have successfully taken the listing, you will want to send Just Listed cards to theneighbors. Mailing Labels can quickly be generated from the Temp Tax records. 1. Go to Tax 2. Type in the address of the property 3. Click Search 4. Click on the Address of the property (a hyperlink) 5. Click on Additional Reports on the upper right 6. Click Perform Radius Search 7. Select the desired radius (1/8 of a mile from the property) 8. Select Residential only 9. Select Search 10. Scroll down past the list of properties and check the appropriate information for your labels and printer. 11. Click Create Label PDFCMA - Price It Right Page - 17 -The Houston Association of REALTORS®
  • 18. Tempo CMA Checklist of possibilities______ 1. Tax Printout of Subject Property______ 2. Print Master Report from Tax Record/Additional Reports______ 3. Run Property Archives for comps______ 4. Map comps from Quick Search - multiple properties______ 5. Buyer Full Report of each comp______ 6. CMA Report from Available Reports______ 7. CMA Wizard - Printout and Email______ 8. Statistics from Quick Search of subdivisions/area Displays High-Low-Average-Median stats______ 9. Area Statistics from Tempo Report Section Displays LP/CP ratio for area______ 10. Months of Inventory Report from Reports/Statistics______ 11. Seller Net Closing Costs from Financial Maybe include Buyer Estimated closing costs for purchasing home______ 12. Set up seller as a prospect to be auto-notified of competition Can set up Off Market Activity for expireds and solds. Will need sold date in Custom Search 13. Run Custom Hot Sheet from Seller Custom Search to______ review or present what is happening in Subdivision etc.______ 14. Run Just Listed Labels from Tax Record/Property ProfileCMA - Price It Right Page - 18 -The Houston Association of REALTORS®