Realtors® are often asked by property owners to prepare a Comparable Market Analysis (CMA). Some of the reasons a property owner may want this information concerning the value of their property may include the need to settle an estate or divorce, besides just because they are thinking about selling. The process of valuing residential property is usually done by a Market Sales Approach, or in other words by comparing the subject property to similar properties in the area that have sold recently in order to form an educated opinion about approximate value. In areas where there are not cookie cutter comparables, this process can be difficult and time consuming.
The time factor is a dilemma for most Realtors® since they usually offer this service for free with the hope of securing a listing. The more troublesome dilemma is facing the anxiety of presenting their analysis to the property owner, since some owners who have an inflated opinion of their property become angry when presented with an honest opinion of its value. It happens frequently enough that most brokers become gun shy and dread such conflict.
One owner angrily referred to my analysis by using an expletive (similar to cow dung) because he did not believe the results or trust in my expertise. He was offended because my opinion of value was considerably less than his. Three years later, his property is still listed for sale by the most recent in a long line of gullible brokers. Another crabby individual called me a “bald faced liar” because his property sold with another broker for an amount that was greater than the value range I had suggested. His accusation was based on the misinformed view that a CMA is a statement of fact rather than an opinion. Another owner impatiently dismissed me during my analysis process, because I was taking too long. In my defense, this was a very unusual commercial property with no obvious comparables. I was in the midst of completing a more detailed type of analysis when he gave me notice that he was going with another broker. That property like the first one I mentioned is still listed for sale, many years later.
Regardless of good reputation or experience, many sellers list a property with the broker simply because their opinion of value tops the competitors. With some discussion about loyalty, the seller may convince a more experienced broker with the lower opinion of value to give it a chance. As you analyze the opinion given by any broker, be honest with yourself, like you expect them to be honest with you!