5 Steps to Get Good At CMA’s
Summary
After you learn how to do a Comparative Market Analysis (CMA), how do you get good at interpreting the comps and determining how much a house is worth?
Here are 5 steps to mastering CMAs:
- Preview 10 or more new listings a week. Get yourself familiar with active listings to gain more market knowledge. Do this for 2-3 hours a day.
- Do CMAs on at least 2 of them each week.
- Decide the price you would list it at…and then track them to see what price each one sells for and how long it takes to each one to sell. This will give you more insight into where you got it right or wrong.
- Ask for insights from top listing agents and appraisers. You’ll learn when you get help.
- Prospect every day and get listing appointments so you get real experience with CMA’s.
The more confident you get, the better you’ll be at getting the best results for your client.
If you want to master how to do a CMA, go to AgentPowerLaunch.com and get my entire CMA Training from one of the 12 complete video training modules w/ over 50 deep dive videos and resources.
What have you learned about mastering CMAs? Share them in the comments section below.
Full transcript
How to master, how to get good at doing comparative market analyses.
Today, let’s talk about how to master, how to get good at doing comparative market analyses. How do you get good at doing a comparative market analysis? Now, this video is not on how to do a market analysis. That’s something that hopefully your broker has taught you, and if they have not taught you, then ask them. And if they can’t teach you, then you can go to my agentpowerlaunch.com and that online course there, one of the bonuses is a deep dive training to how, step-by-step, how do you do a market analysis? How do you actually do a comparative market analysis?
However, in this video I want to talk about once you know how to do a comparative market analysis, how do you get good at it? How do you get good at doing a CMA that you can trust that you can count on? That you can feel confident that when I look at this market analysis, I can actually determine how much a house should actually sell for.
So in this video, I’m going to give you five steps of how to do that, how to master getting good at a market analysis once you know how to do one. So number one is, you got to get out into the market and get to know the market.
And the way you do that is, step number one, is preview 10 or more homes, new listings every week. Every single week, you want to get out there and look at houses. Look at the new listings that are coming on the market or the active listings that are out there on the market. And I recommend that you look at 10 houses a week or a couple of houses a day on average.
Now you can go look at typically four to six houses an hour depending on how fast you are, how tight the neighborhood is or the areas are that you’re looking. You can go out and look at a bunch of new houses, it does not take you about 10 or 15 minutes. What you can do, walk through in five to seven minutes through a house, make a five-minute drive to the next house and go do that. You just set up preview appointments and go do that. And I recommend 10 a week and you can do a couple a day when you’re out doing your door knocking or prospecting and just find a couple of active listings that are out where you’re going to be, set a preview appointment on them and drop by there.
Or you can do it in one afternoon. Spend a couple of hours just going to preview properties and go look at 10 different houses in a specific area, all right? And new listings, if you have broker opens or sales truce, you can do it however you want to do it, but the key is get out there and look at houses, look at houses that are on the market and get a feel for, okay, this house in this neighborhood, they’re listing it for 1.6 million. Okay? Now I kind of know a kind of get a feel for that. Now that doesn’t tell you what it’s going to sell for, but we’ll get to that in a minute.
The key is that you get out there and consistently look at properties. Now think about it. If you look at 10 houses a week, let’s say you’re absolutely brand new in the market. You don’t know the areas, you’re still trying to learn it from scratch. If you’ll give yourself 10 houses a week, in a month, you’ve looked at 20 houses, I’m sorry, in a month you’ve looked at 40 houses. In a year, you have looked at 500 houses on the market, all over your market area and now you got to understand, you look at 500 houses, you’re going to have a pretty good idea, pretty good feel for what’s going on out there in the market. The key is consistently being out there and doing that.
Now second step. While you’re out there previewing those properties, I want you to pick a couple of them. Every week. Of the 10 you’re looking at, pick two of them and do CMAs on two of those 10 listings you’re out looking at each week. Do CMAs on at least two of the properties that you’re previewing every single week. So this is just practice now, right? I go look at the listing or I can even do it before I go look at the listing and go, okay, I’m going to go see these properties today.
I like this one and this one. I’m going to do a CMA on them. Before I go out or after you go at, it doesn’t matter, but the key is that you do the CMAS on at least two of those properties every week. And then when you do the CMA, you decide the price that you would list it at if it was your listing.
All right, you pick the price. I look at the comps, there’s all these comps. I see them, I look at them, I’m okay. And then I go out and I look at this property or before I go out either way, and then I can go up if I have. If you do the CMA before you go out, then when you set your price and say like, “Okay, if I was going on a listing presentation right now, I think this property would be worth 1.5 million.” And you go look at the property and “I’m, Oh, nicer than I thought. I think it’s going to be 1.6 million” or “It’s not as nice as I thought. I think it’ll probably be 1.3 million” or whatever it is. But anyway, when you do the CMA, you then decide on the price that you would list it at, if it was your listing. And then you track those CMAs that you do, to see what they actually end up selling for.
I want to know, okay, and I want to know how long it takes it to sell. So what that means is every week is I’m previewing these 10 homes, I’m doing CMAs on two of them. I’m writing down what I think the list price should be and what I think it will sell at, which should be the same price because you’re wanting to identify what the actual market value is. Get good at that. And then you just have to grab your folder and every week you’re taking those 2 CMAs and you’re going to drop them in that folder. And every week as you get ready to do your previews for the week, you can pull out your folder and you can go back and look while you’re on the MLS.
You go back and look at those houses you’ve done the CMAs, see if they sold yet and when they sell, you’re going to see how long they sold, how long it took them to sell. What price did they actually sell for? Did it require one or more price reductions? So you get a feel for, was I right? All right. And as you’re doing this, you’re getting a feel. You’re getting a feel, not only of the market. You’re also getting skilled at doing CMA’s. You’re also getting skilled at how do you make adjustments, what counts for what, what counts for this? So this is all still stuff you’re doing on your own.
Now step number three, or rather, Step number four is now where you start getting outside help. And that is ask for insights from the top listing agents in your office and from appraisers. So as you’re learning this, if you do a CMA and then you look at it and then you’ve, it’s that property sells and you realize you were way off, go to one of the top listing agents in your office or talk to an appraiser and go, “Here’s what I saw. What did I miss?” Okay. Or you can even talk to the listing agent, if it’s somebody you know. But the key is, start asking for help.
Ask for insights from other people that are good at understanding how you determine a market value of a property based on what the comps are actually saying. And then number five, the fifth step to getting great at CMAs is to prospect every day, focus on sellers, and get listing appointments, so that you have real CMAs to do as well. Because now when that happens, it’s game on. It’s the real deal. This is not practice CMA’s anymore. This is where I actually put the rubber meets the road. I’m actually putting my practice into action to go out and do a market analysis present it, see what feedback I get from the seller, master that process, and then get that listing and sell it. And then you’ll know that you priced it right. It’s all about determining how do you get great at something.
Okay, so real quickly, preview 10 or more homes every week, do CMAs on two of them and track them and keep track of those to see how long it takes them to sell and what they sell for. Decide what price you would set on it and then track it.
Number four, ask for insights from top listing agents and appraisers in your area and then prospect every day and set listing appointments. So you’re doing your own CMAs, because that’s ultimately the best way that you are going to prepare.
Now, if this video has helped you, give it a thumbs up, subscribe to the channel if you haven’t done that before, if you have any questions on it, please post them down below. And again, this video is not designed to teach you step by step how to do a CMAs. It’s how to get good and accurate at doing CMAs.
If you want a deep dive training into the step-by-step, how to actually create your own CMA, then register for my Agent Power Launch online training course. Go to agentpowerlaunch.com, register for the training. That is massive amounts of modules on everything you need to do in your first year as a real estate agent to help you become successful as a real estate agent. And one of the bonus trainings on it is my complete course on how to do CMAs How to do a comparative market analysis that normally I teach to my coaching members. So hope that helps and I’ll see you on the next video.