When an agent comes to your home for a Listing Appointment, the crux of activity is centered around what we in the industry refer to as the Comparative Market Analysis (CMA).  To the inexperienced Sellers out there, here's a brief overview of how a CMA works...

It's YOUR home versus EVERY other comparable property in the immediate area!!  This is how we, as agents, help our Sellers establish a realistic Asking Price.  Recently sold listings, expired listings, and active listings all need to be taken into account while establishing an acceptable price range.  And believe you me, the vast amount of properties on the market today make it necessary to take great care in compiling a "Good" CMA.

Let's go over how each listing type affects the CMA:

Active Listings - This is your competition!!  The idea is to basically attempt to out-price your competitors, addressing subtle differences in value between your home and the rest. 

Expired Listings - Learn from the shortcomings of others!!  These homes never made it to closing because they were most likely priced incorrectly, though, in some cases serious defects may have been present.

Recently Sold (Closed) Listings - The homes that make it to closing are obviously the successful ones!!  Matching these listings as close as possible serves to be a good indicator for how your home will perform in the current market.

I don't like to include Pending Sales in my CMA's for the simple reason that you just don't know what offer was initially accepted, as well as if whether or not the sale will actually close.  If necessary, I like to treat these listings as still being Active, but they generally won't be included.

But how far back should the Comparative Listings go??  And how far does the "immediate area" extend??  As a general rule of thumb, I like to stay within 3 months of my current listing date, trying to narrow down my list of comparables to a specific map coordinate (usually 1 square mile), only widening the gap when necessary.  This keeps the information as relevant as possible!

It's the job of the Listing Agent to take ALL of these factors into account, in an attempt to find a 'happy medium'!!  It's enough to make you want to pull your hair out!!  But to the Sellers out there, rest assured that with a professional on the job, you won't be steered in the wrong direction! 

#1 Century21 company in the WORLD 2010 SMARTER. BOLDER. FASTER.
Century21 M&M and Associates