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CMA adjustments

Licensed Real Estate Broker

Cumming, GA

June 27, 2010

Does anyone have a list of suggested adjustments to CMAs for subject property?  I can adjust the square footage but wonder if other people have set values they use, i.e, Finished basement, additional bathroom, bedroom, Kitchen upgrades, etc.

Thanks,

Jennifer Davis

Licensed Real Estate Agent

Cooper City, FL

June 27, 2010

Unless you are an appraiser it is not a good idea to do adjustments

especially in writing.

Dominick Napoli, Broker/Associate

Coral Shores Realty

Ft Lauderdale, FL

Licensed Real Estate Broker

Falls Church, VA

June 28, 2010

Jennifer wrote, "Does anyone have a list of suggested adjustments to CMAs for subject property?"

Dominick responded, "Unless you are an appraiser it is not a good idea to do adjustments especially in writing."

I disagree. Making various adjustments on a CMA is not hard to do at all. Where can you get those to create a list? Easy. One way is to get builder option lists from any new home subdivisions being built around you and start building up a file of those. What do builders charge to make a half bath into a full bath instead? How much is it to have hardwood floors on the main level vs. wall to wall carpet? You get the idea. After a while, you will see cost patterns develop that will give you approximate price ranges.

While we know that many builders mark those options up, you can still get a good idea of the "ballpark" prices. Then as long as you use these values consistently in making your adjustments, all of your math will be the same across the analysis.

Appraising real estate in not an exact science. Even the appraisers, in making their adjustments, have to approximate these adjustments too.

Finally, if you ever get a chance to take an "introduction" course in appraising, do so. It will help you immensely in being better at doing a market analysis! I know it was one of the best classes I ever took and the knowledge I gained has benefited me for years.

Win

**********************
Win Singleton, CRB, SFR, e-PRO
Associate Broker
Northern Virginia Real Estate, Inc.
1018 Shipman Lane, Suite 200
McLean, VA 22101
(703) 536-7631
wins@winsingleton.com
Licensed in Virginia
**********************

Licensed Real Estate Agent

Eden Prairie, MN

June 28, 2010

Jennifer wrote, "Does anyone have a list of suggested adjustments to CMAs for subject property?"

One person previously responded by going to the local builders for their costs which I think was a good idea.

I use two other options. I like to look at the appraisals done for homes I have sold and I can get some ideas for the adjustments. There might be some features that are hard to give adjustments. I will ask myself if I feel it is worth a buyer paying X amount more for this feature. If you think a lot of buyers would be willing to pay the higher amount, that would be a good adjustment. If a lot of buyers would not pay the extra amount, than the adjustment was too high.

Chris Allen
Counselor Realty
Minnesota Realtor
www.agentallen.com
chris@agentallen.com

Murrysville, PA

June 28, 2010

Great advice Win. I worked a Plan/Builders for a few years and did just that... By asking them costs for additions, upgrades, what average size bedroom cost etc. I was able to complile a very helpful cost list to use in my comparibles, it has worked well for me. Thanks for the very useful information..

Licensed Real Estate Broker

Albuquerque, NM

June 28, 2010

Jennifer,

What I hear you asking is a way to get closer to the price property should be listed at if there are differences that are not size alone. Marshall and Swift years ago had a book called Residential Cost Handbook. It helped me a lot when I was new to the business .

Real Estate Appraiser

Applegate, CA

June 30, 2010

"Cost does not equal value" I am citing Real Estate Appraisal 101, taught in all appraisal schools and colleges all over the country! What you are looking for on your CMA is the reaction to the market from several features in the subjact and the comparables. It would be advisable to ally oneself with a licensed appraiser who could perhaps help out, or even act as a consultant for a fee. I have done lots of these "pre-listing" appraisals in the past, and they have been valuable to both the agent and the client. Of course, the loan appraisal must be done as a loan appraisal!

Real Estate Educator

Jersey Shore, PA

June 30, 2010

TNeathery is correct--as a Certified Appraiser, I do make adjustments, and they vary. For example, buyers have different expectations which vary with the price of the house. If a $50,000 house only has one bathroom, and a comp has two, it is a much different adjustment than if a $500,000 has only has 2 baths, and all the comps have 3 or more. If you have a challenging property it is a great idea to ask the sellers to get an appraisal done--then the appraiser is the 'bad guy' and you aren't.

Licensed Real Estate Agent

Cooper City, FL

June 30, 2010

AMEN

We are here to give price ranges - not opinions of value.

Licensed Real Estate Broker

Denver, CO

March 16, 2011

Okay, I'm not a listing agent, so how do some of your comments apply to me as an exclusive buyer's agent? I want to do adjustments, and our MLS CMA program allows for it, to show the relative value of several houses. It's part of my job. I just wish somebody would publish basics, e.g., 3 vs. 4 bedrooms, 3 vs. 2 baths, 3 vs. 2 car garage, 1 vs. 2 fireplaces, you know, the kind of thing we run into every day. I know it's area-specific, but still, it would definitely be helpful. One resource is the cost to remodel survey that comes out from the remodeling industry. That does help.

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