Who Provides and Pays for a CMA?
A CMA is generally provided either by your real estate agent or the agent for the buyer. When planning to sell your house, your agent will determine the value through a CMA. A buyer's agent may also provide a CMA to show her buyer what your house is worth. Because comparable properties are never an exact match, values produced in CMAs can vary within a range. Your agent's CMA may be in the higher range, while the buyer's agent may provide a CMA to justify a lower offering price.
In general, a real estate agent will provide a CMA as a free service. They often use it as a marketing tool to solicit your business, and they do not expect to be paid. Your agent may do several CMAs during the time your house is on the market as changes in the market occur. This will allow you to be sure your home is priced correctly.
Some real estate agents will inflate the value of your house in order to get your business. They want to please you and will try to prove a value based on the value that you desire, rather than a more realistic value. They may use comparable properties that are not truly comparable, or they may not make adjustments when they should. This is known as buying the listing. Agents do this for a number of reasons.
They may want to please you and hope you will hire them based on the value they assign the property, rather than their qualifications as an agent.
Even if the property is overpriced, they may want the advertising opportunity that listing your home would provide in order to get buyers to call them.
They may know they are pricing too high initially and are hoping they will be able to convince you to reduce your price once they have you under a listing contract.
They may honestly believe that if they work hard enough that the property will sell for the escalated price. This belief is usually borne of inexperience, either in real estate in general or in the area or type of home you have.
When you interview agents, note the different values they place on your property. If one value is considerably higher than the others, consider that this is wishful thinking on the part of the real estate agent or you. To prevent this as much as possible, it is wise to allow the agent to determine the value without telling them your hopes for the asking price. If an agent asks you what price you think the property should be marketed at, ask them to come up with a value first. After all, they are the professionals.
