A CMA is one of the primary reports you'll be creating for your seller clients. In many ways, it will be the foundation for the rest of your work together. And comps are the foundation of your CMA. Needless to say, choosing the right comps is an essential skill to master. If you have been selling real estate for years, you have the CMA perfected. But if you are new, this article may provide you some quick suggestions to increase your acumen.

CMA

Some people choose to create CMAs using their MLS system. However accurate, this solution isn't the most aesthetically appealing. Moreover, the worst possible listing presentation would have you showing up with the exact same MLS CMA report presentation as another agent.

Therefore, many agents are choosing to use premium CMA tools that also offer more attractive and customized visuals. Most of these CMA tools give you the option to choose your own comps or will automatically select comps for you.

Let's walk through an example. I'm going to use Cloud CMA because they're quite popular and I'm most familiar with their solution. The image below demonstrates the two options for choosing comps:

Whether they are automatically chosen by your CMA tool or whether you choose them yourself, you'll need to understand the factors that make for a great comp. This will help you weed out bad comps when they are automatically chosen and make excellent selections when you choose comps yourself.

4 Factors for Success

Obviously, the following are not hard-and-fast rules. Choosing comps is often a tightrope walk juggling multiple factors. However, these are a good place to start.

• Keep 'em current. Markets change quickly. Your comps should be very recent (within the last few months). The more volatile your market, the more important this factor becomes. If your market changes slowly, it won't matter as much and you may be able to look back up to six or seven months. Obviously, you can't create comps that don't exist; if there aren't any comparable properties that have been sold recently (for instance, if you have a very unique property), you may have to look back even further.
• Choose similar properties. Obviously. A great comp will be similar in square footage, number of beds/baths, age, style, materials and lot size.
• Stay close to the same 'hood. Neighborhood is important when choosing a home and when choosing comps. An ideal comp will be in the same neighborhood; however, that may not always be possible. Instead, focus more on avoiding comps in neighborhoods that are significantly more or less desirable.
• Don't ignore the hard-to-quantify factors like landscaping, views, noise, and curb appeal.

Remember, the purpose of a CMA is not only to provide data that supports your pricing opinion – but a book that helps you tell a story. Be sure to practice your story telling as you walk though the CMA. Be sure to inject information that you know about the area, or about the homes that are in your CMA. Remember, the #1 reason why consumers choose you is because of your local expertise. Let it shine!

How Do You Choose Comps?

What did I miss? Tell me what you find most helpful in picking comps.