Wednesday’s Objective: Using the MLS to do a CMA
MLS – The best tool: Regardless of where you sell real estate, your Multiple Listing Service (MLS) is the ultimate tool to assist a Realtor in creating a professional CMA. MLS usually will have much more data than public tax records and Zillow because you can actually see pictures of past sales, read remarks, access the past listing and sales history, and contact your fellow Realtors to gain insight on individual sales.
Steps to a successful MLS search:
- Ask the seller if there have been any additions to the property that could change the square footage.
- Search by correct category – single family? Condo-Townhouse?
- Try to stay within 3-6 months back on sold data
- Keep your price range within 15% high and low of your assessed value from Tax Records
- Stay within the same or similar school districts
- Search like numbers of bedrooms and baths
- If possible, stay within same subdivision/community
- Stay within 20% plus minus of square footage (not the best category to use)
- Don’t forget the old adage that “less is more.” Too many criteria in an MLS search will limit the number of comparable sales you see. Start with very few criteria and slowly add criteria to bring the number of comparable sales down to a manageable number and to ensure you are getting quality comps. It’s not about the number of comps – it’s the quality of the comps.
Understanding Search Categories: Active, Pending, Sold, and don’t forget Expired
Active – These are homes currently on the market. This is your immediate competition. Examine the listing history to find true days on market, any prices changes, and if the property has been listed by multiple firms.
Pending – These homes are a barometer of the current housing market. The same advice applies as with Active listings. The pended inventory data can tell you how quickly homes are selling now – remember the quicker the sale, the more likely the seller achieved their list price.
Sold – This is your six-month history on sales. You must look at these homes and determine which homes an appraiser will use as comparable sales for any future appraisal.
Expired – Most agents forget these comps. Expired homes represent homes that never sold, and they can offer a wealth of information into the future of your listing. Was the home too outdated? Was the price too high? Did the home lack central air? These listings are a great insight into why homes don’t sell which is just as important as why homes sell.
- Do a CMA using the MLS.
- *Note: do not use the “CMA” tab in Paragon. That will bring you to the CMA wizard, we will discuss that feature later this week. For now, do the CMA manually by using the MLS search.
- Need help searching in IMLS? Watch the “Search Fields” Paragon tutorial here: http://paragonconnect.paragonrels.com/videos-landing-page/current-recorded-webinars
- Using a different MLS? Please contact your MLS provider.