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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
10/23/2018 Greater San Diego Association of REALTORS Virginia Field San Diego CA Register Online
(858) 715-8040
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10/23/2018 Mid-America School of Real Estate Rob Mehta Des Moines IA Register Online
10/23/2018 Calaveras County Association of REALTORS Angels Camp CA Register Online
(209) 736-4600
10/24/2018 Northern Virginia Association of REALTORS®, Inc. Larry Anderson Fairfax VA Register Online
703-207-3200
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10/25/2018 Coldwell Banker School of Real Estate Mary Chieppa Columbia MD Register Online
800-992-4794
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10/26/2018 Realtor Association of Central Massachusetts Auburn MA Register Online
(508) 832-6600
10/28/2018 Realtor Association of Prince William Rebecca Straley Woodbridge VA Register Online
703-565-0033 ext 206
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11/05/2018 Honolulu Board of Realtors Honolulu HI Register Online
(808) 732-3000
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11/07/2018 Oakland Berkeley Association of Realtors Oakland CA Register Online
11/07/2018 Harford County Association of Realtors Bel Air MD Register Online
11/08/2018 Ohio REALTORS Alec Hagerty Columbus OH Register Online
614-225-6229
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11/08/2018 West Maricopa County Regional Association of REALT Frank Dickens Peoria AZ Register Online
623-931-9294
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11/09/2018 Greater Nashville Realtors Susan Barnette Nashville TN Register Online
615-254-7516
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11/09/2018 South Shore Realtors Pembroke MA Register Online
(781) 826-5139
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11/09/2018 Mainstreet Organization of REALTORS Downers Grove IL Register Online
630-324-8400
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11/14/2018 Contra Costa Association of Realtors Walnut Creek CA Register Online
11/14/2018 Rogue Valley Association of REALTORS Medford OR Register Online
541-779-9421
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11/19/2018 Champions School of Real Estate Champions Live! TX Register Online
713-580-4946
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11/28/2018 LearnMyWay® (Webinar Remote Learning) LearnMyWay® CA Register Online
(213) 739-8241
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11/28/2018 Nebraska REALTORS Association Omaha NE Register Online
1-800-777-5231
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12/07/2018 Greater Fort Lauderdale Realtors Tamarac FL Register Online
(954) 567-5049
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12/18/2018 Greater Capitol Area Association of REALTORS® Rockville MD Register Online
01/16/2019 Champions School of Real Estate Champions Live! TX Register Online
713-580-4946
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02/21/2019 New Haven Middle Sex Association of REALTORS North Haven CT Register Online
203-234-7700
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03/01/2019 Mainstreet Organization of REALTORS Arlington Heights IL Register Online
630-324-8400
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The Real Estate Buyer's Agent Council (REBAC), f. 1988, promotes the superiority of a buyer's representative's skills and services. REBAC's membership is the world's largest organization of real estate professionals concentrating on buyer representation.

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