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Pricing Strategies: Mastering the CMA
Affiliation: PSA
Format: Classroom, Online
Pricing Strategies: Mastering the CMA

Course Credits:

Duration: 1 Day

Format: Classroom

Course Objective

At the conclusion of this course, students will be able to:

  • Select appropriate comparables and make accurate adjustments to them, for use in developing home price opinions
  • Guide sellers and buyers through the details of CMAs and the underlying pricing principles that inform them
  • Interact effectively with appraisers

Learning Objectives

Module 1: Principles of Pricing

  • Identify the purpose and benefits of CMAs
  • Define key terms related to pricing
  • Interpret Article 11 of the REALTOR® Code of Ethics as it relates to pricing properties

Module 2: Choosing Appropriate Comparables

  • Recognize appropriate criteria, resources, and guidance in choosing comparables
  • Identify causes of imperfect information and its consequences with for pricing properties
  • Use appropriate comparables in a CMA

Module 3: Preparing the CMA

  • Explain key principles of pricing that impact CMAs
  • Recognize correct guidance, as well as common challenges and errors, in adjusting comparables
  • Adjust comparables, using values developed from appropriate averages and cost data

Module 4: Presenting the CMA

  • Discuss CMA documents and pricing conclusions with clients
  • Address client concerns about pricing
  • Explain value principles to clients

Module 5: Working with Appraisers

  • Recognize the purpose of appraisals and the scope of the appraiser's role
  • Describe how real estate agents can work constructively with appraisers
  • Assess an appraisal and proceed appropriately when you think it contains inaccuracies

Module 6: Honing Your Pricing Habits

  • Recognize strategies and tactics for keeping up to date on your markets
  • Recognize common client misconceptions about price
  • Employ best practices for pricing properties in your daily work

Course Outline

Introduction

  • Welcome
  • Instructor and Student Introductions
  • About This Course
  • How to Earn the Pricing Strategy Advisor (PSA) Certification
    1. Benefits
  • What You Will Learn
    1. Module 1: Principles of Pricing
    2. Module 2: Choosing Appropriate Comparables
    3. Module 3: Preparing the CMA
    4. Module 4: Presenting the CMA
    5. Module 5: Working with Appraisers
    6. Module 6: Honing Your Pricing Habits
  • Introduction Exercise

Module 1: Principles of Pricing

  • Learning Objectives
  • What is a CMA?
    1. Not the Same: CMAs and Appraisals
  • Valuation Services Matrix
  • The Purpose of CMAs
  • Who Needs CMAs?
    1. Sellers
    2. Buyers
    3. Agents
  • Advantages of CMAs for
    1. Sellers
    2. Buyers
    3. Agents
  • Valuation Language and Basic Principles
    1. Cost, Price, and Value
  • Market Value According to Fannie Mae
  • Pricing and the REALTOR® Code of Ethics
    1. What the code says
      1. Article 11 reads
      2. Standard of Practice 11-1 reads
      3. Standard of Practice 11-2 reads
    2. Value or Price?
    3. Interpreting the Code: The Importance of Competency
  • Exercise 1.1: Is Agent Alex Competent to Develop This Price Opinion?

Module 2: Choosing Appropriate Comparables

  • Learning Objectives
  • The Goal: Optimal Similarity to the Subject
  • Characteristics of Comparables
    1. Date of Sale
    2. Location
    3. Size
    4. Micro Markets
    5. Amenities
    6. Exercise 2.1: Amenities in Your Market
    7. Improvements
    8. Exercise 2.2: Improvements in Your Market
    9. Number of Comparables
  • Fundamental Principles for Choosing Comparables
    1. Highest and Best Use
    2. Arm's Length Transactions
  • Fannie Mae Guidance on Choosing Comparables
    1. What the Guidance Says, Selection of Comparable Sales
    2. Interpreting the Guidance
  • Roadblocks to Choosing Comparables: Imperfect Information
  • Resources for Identifying Comparables and Analyzing Markets
    1. MLS
    2. Public Records
    3. REALTORS Property Resource® (RPR®)
      1. Automated Valuation Models
      2. Access to RPR® and RVM®

Module 3: Preparing the CMA

  • Learning Objectives
  • The Role of Supply and Demand in Pricing
    1. Absorption Rate
  • Exercise 3.1: Using Absorption Rate to Advise Clients
  • Methods of Adjusting Comparables
    1. Cost-Based Adjustments
    2. Market-Based Adjustments
    3. The Importance of Market Expectations
    4. Making the Adjustment
    5. Applying the Principles of Substitution and Market Expectation
    6. Substitution
  • Fannie Mae Guidance on Adjusting Comparables
    1. What the Guidance Says
      1. Analysis of Adjustments
      2. Sales or Financing Concessions
    2. Interpreting the Guidance
  • Specific Considerations in Determining Adjustments
    1. Bedrooms
    2. Bathrooms
    3. Gross Living Area
      1. Adjusting for Gross Living Area
    4. Age
    5. Lot Size
  • Potential Mistakes and Special Challenges in Making Adjustments
    1. Double Dipping
    2. The Wrong Reasons to Adjust
    3. Outliers
    4. Stigmatized Properties
  • Exercise 3.2: Adjusting Comparables and Arriving at a Price Range

Module 4: Presenting the CMA

  • Learning Objectives
  • What the CMA Report Contains
    1. Common Disclaimer Information
  • Guiding Clients through the CMA
    1. Understanding the Market
    2. Considering the Comparables and Competition
    3. Moving from a Price Range to a Listing/Offer Price
    4. Getting to Agreement
    5. When Sellers and Buyers Disregard Your Pricing Recommendations
  • Exercise 4.1 Recommending a List Price

Module 5: Working with Appraisers

  • Learning Objectives
  • When a Property Appraises Below Offer Price
    1. Distressed Markets & Appraisals
    2. Appraisals Compared to CMAs
    3. What Appraisers Do
    4. Who the Appraiser Works For
  • Steps in Working with the Appraiser
    1. Meet the Appraiser
    2. Prepare Appraiser's Package
    3. Appraiser's Package Contents
    4. Appraisal Tools
    5. Return Appraiser Calls
  • How to Read an Appraisal Report
    1. Interpreting an Appraisal Report
    2. Red Flags in an Appraisal
  • When a Property Appraises Below Offer Price
    1. Distressed Markets & Appraisals
    2. Challenging an Appraisal
    3. The Long Life of an FHA Appraisal

Module 6: Honing Your Pricing Habits

  • Learning Objectives
  • Listening to the Market
    1. Staying Up to Date on Market Changes
    2. Revisiting Historical Data
    3. Developing Human Resources
    4. Following Industry News
  • Exercise 6.1: How Do You Stay Up to Date?
  • Educating Clients
    1. Seven Deadly Seller Sins
    2. Five Buyer Bloopers
    3. When Homes Sell Quickly: I Should Have Asked More!
    4. Sellers in the Driver's Seat
    5. What Clients Can and Cannot Control
  • The Pricing Pyramid
  • Revisiting Price
  • Legal and Ethical Requirements
    1. Confidentiality Obligations
    2. Standards of Practice 1-9
    3. Records Retention
  • Exercise 6.2 Your Challenges in Pricing Discussions

Conclusion

  • Key Learning Points
  • Questions and Answers

Exam

This course is available online through REALTOR University Click here for registration
DateCompanyInstructorLocationRegister
11/14/2019 Middle Tennessee Association of REALTORS Robert Morris Murfreesboro TN Register Online
615-893-2242
Send an Email
11/14/2019 New York Association of REALTORS Linda Damico Riverhead` NY Register Online
(518) 463-0300
Send an Email
11/19/2019 Ohio Association of REALTORS® Alec Hagerty Columbus OH Register Online
614-225-6210
Send an Email
11/20/2019 Rhode Island Association of Realtors Warwick RI Register Online
11/21/2019 Austin Board of REALTORS Reba Saxon Austin TX Register Online
(512) 454-7636
Send an Email
11/21/2019 North Shore Association of REALTORS® Beverly MA Register Online
978-232-9410
Send an Email
11/25/2019 Greater Louisville Association of REALTORS Louisville KY Register Online
http://ims.lbr.org
Send an Email
12/06/2019 Champions School of Real Estate Rebecca Hill Houston TX Register Online
12/11/2019 Greater Metropolitan Association of REALTORS® Deanna DuRussel Southfield MI Register Online
(248) 478-1700
Send an Email
12/13/2019 North Central New Jersey Association of REALTORS® Gary Large Bloomfield NJ Register Online
(973) 743-5114
Send an Email
12/17/2019 Eastern Connecticut Association of REALTORS Rhonda Ivey-Lentini Putnam CT Register Online
860-892-2595
Send an Email
12/17/2019 eXp Realty Stafford VA Register Online
540-379-1949
Send an Email
04/08/2020 Greater Nashville REALTORS® Nashville TN Register Online
615-254-7516
Send an Email
04/24/2020 Dynamite Productions Pleasant Grove UT Register Online
06/05/2020 Scottsdale Area Association of REALTORS Scottsdale AZ Register Online
10/07/2020 Greater Nashville REALTORS® Nashville TN Register Online
615-254-7516
Send an Email
10/14/2020 Fredericksburg Fredericksburg VA Register Online

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