One of the first steps when working with home sellers is setting a list price for their home. Which means, before you meet with them you have to look at how similar homes have been selling in their area. What was their average list price? How long did they sit on the market? Did the property expire and have to be re-marketed? Answering these questions in advance will help you come up with an effective list price that will sell their home quickly, rather than letting it sit on the market. Because more time on the market means – frustrated sellers, more marketing dollars spent… you get the picture.
The easiest way to present this information to your sellers is in the form of a Comparative Market Analysis report, better known as a CMA. Knowing how to properly craft a good CMA is crucial, but not always easy. Whether you are new to real estate or have been in the industry for awhile, at some point you have probably Googled “How to do a CMA.” After sifting through articles and feeling like you’re ready to create your CMA, there are likely still some questions left unanswered.
One question is – how many comps should you include in your CMA? If you don’t include enough, you might not give your sellers the full story about what’s going on in their market. Include too many, and you’ve got a daunting report that will likely lose your sellers mentally before your presentation is even over – and if printed and bound, it will be falling apart at the seams.
So what should you do? Just how many comps is the right amount?
We recently surveyed over 3,000 real estate agents from across the country to find out just how many comps is the right amount of comps. And here’s what we found:
On average, agents include a minimum of 5 comps in their report.
Which means, at the very least, this is what you should be including. But there aren’t that many homes that have recently sold in our area that match my sellers’ – what should I do? While sold properties are the most important comps, you should also include other property statuses like actives, pending, and expired. When you combine all those comps together, coming up with 5 shouldn’t be too hard.
But now, what is the max number of comps you should include in your CMA? In our recent survey, here’s what we found:
On average, agents include a maximum of 11 comps in their report.
This may seem like a lot. But again, when you take into consideration including multiple property statuses, this can quickly be achieved. Having this many comps in your report will give your clients peace of mind that you have done your research. Which means, when it comes time to deliver your suggested list price, it will make it easier for them to trust what you have come up with.
So there you have it! Now you don’t just know how to create a CMA, but you know exactly how many comps to include so you can win the trust of your clients, get them to accept your list price, and most importantly win the listing!
Cloud CMA offers a quick and easy way to pick the right comps for your sellers home. Using a state of the art algorithm, our Quick and Dirty method pulls tax data for the subject property to instantly pull the best comps. Choose which comps you want to include, select custom pages to include in your report, and in minutes you can have a beautiful CMA to share with your clients!
Cloud CMA is free to try for 30 days, so what are you waiting for? Create your free account today!