Upgrade to remove ads
Only $35.99/year

Florida Real Estate Broker Chapter 8 - Comparative Market Analysis

Terms in this set (38)

When measuring the square footage of a house, an appraiser uses:
exterior dimensions
Kevin is preparing a Comparative Market Analysis for a potential listing. He will gather
information on all of the following comps except
Listings scheduled to go on the market later this month
The Comparative Market Analysis is an informal method of estimating a property's value by comparing that property (subject property) to other, similar properties (comps) that have sold or are
currently for sale or whose listings have expired.
The person performing the CMA will consider comps that have
sold, comps currently for sale (current competition), and expired listings (because expired listings may be evidence that a listing price was too high).
the estimated value of a property as determined by a real estate broker or other real estate licensee working under the direction of a broker
A Broker Price Opinion
lender who wants an assessment of a property for such needs as the refinancing of a mortgage or a foreclosure might request a
A broker price opinion
The primary difference between a broker price opinion and an appraisal
is cost
There are several basic steps in providing comparative market analysis, CMA.
• First, a real estate licensee will evaluate the subject property as per its features and characteristics • Then locate the three best comparable properties and record their details and sold prices. The licensee will make adjustments to the sold prices for differences between the comps and the subject property • The market value of the subject property is calculated from adjusted sold comparable prices.
This listing of currently available homes for sale at this time is usually obtained from
the MLS® database
Lot Size (frontage and depth)
The licensee also should have the width of the lot, both the frontage and depth of the compared properties
the best tool for researching the neighborhood
Google Street View
researching the neighborhood will be looking for
• Nice blocks versus less attractive blocks • Proximity to amenities like beaches, parks, schools, etc. • Proximity to unpleasant locations like garbage dumps, highways, industrial facilities, etc. Significant curb appeal issues
a term used to describe the general attractiveness of a house or other piece of property from the sidewalk to a prospective buyer. This term is often used by realtors trying to sell or evaluate a piece of property
Curb appeal
In preparation for performing a CMA, the licensee should gather the following appropriate information concerning the subject property:
1. Names and Address of the Owners
2. Adequate Description of the Property
3. Lot Size (frontage and depth)
4. Number and Size Of Rooms and Total Square Footage
5. Construction and age of the building
6. Information relative to the neighborhood (schools, churches, transportation)
7. Current Taxes
8. Amount of Existing Financing
9. Utilities and Average Payments
10. Appliances to be Included in the Transaction
11. Zoning Classification (especially important for vacant land)
12. Personal Property and Fixtures Included in Sale
13. Environmental Hazards
Environmental hazard risks may include the following:
• fire flooding • rain/storm • air emissions • ground and surface water contamination • soil contamination • explosion and earthquakes
factors which have to be analyzed, assigned a dollar value, and used for adjusting the comp's selling price include:
1. Location
2. Size and Shape of the Lot
3. Landscaping
4. Construction Quality
5. Style
6. Design
7. Age
8. Square Feet of Gross Living Space
9. Number of Rooms
10. Number of Bedrooms
11. Number of Bathrooms
12. Kitchen
13. Other Space
14. Condition of Exterior
15. Condition on Interior
16. Garage
17. Other Improvements
the square footage of the gar-age and an exterior porch or lanai areas are then subtracted from the overall square footage to determine the GROSS LIVING AREA, sometimes referred to as
the heated and cooled square footage
A full bath contains
a toilet, a lavatory, and a tub, with or without a shower.
A 3/4 bath
contains a toilet, a lavatory, and a shower
A 1/2 bath
only contains a toilet and a lavatory.
The act of adding or subtracting adjustments to the comparables is called
reconciliation
When measuring the square footage of a house, an appraiser uses:
exterior dimensions
If a house structure measures 60'x 75' and the attached garage measures 25' x 20', what is
the gross living area of the house
60'x 75' = 4500 square footage
25' x 20' = 500 garage measures
4500 square footage - 500 garage measures = 4000 gross living area
If a comparative property has a feature that adds $20,000 to its value, and that feature is not
found in the subject property, how should the adjustment be made on the Comparative
Market Analysis
Subtract $20,000 from the comp
A lender needs to set a listing price on one of his foreclosed homes. He will more than likely
order a(n):
BPO
What is the primary difference between a broker price opinion and an appraisal?
Cost.
What is the first comp needed in order to perform a CMA?
Location.
What is the best source for acquiring comp data and information
Multiple Listing Service (MLS)
What category of comparables should be used in order to perform a CMA?
a. Currently on the market.
b. Sold during the last 12 months.
c. Expired or removed during the last 12 months.
Jackie has a subject house that has 3 bedrooms, 2 baths and a 2-car garage. She finds three
comparables to reconcile with the subject house. Which of the following is true?
If the comparable is better than the subject property, subtract from the comparable property
What is the square foot of gross living space?
The upstairs and main floor of the house
The act of adding or subtracting adjustments to the comparables is called:
Reconciliation
Susan is comparing properties in the area. Her subject house is a two-story home with a
three-car garage, 4 bedrooms, 3 baths, a swimming pool, and a screened-in porch in the
Avondale subdivision. She finds comparables in the same subdivision that include a twostory
with a three-car garage, 4 bedrooms, 3 baths, a pool, but no screened-in porch. What
should Susan do with this information
Susan should add the cost of a screened-in porch to the sold price of the
comparable to make it similar to the subject house.
Which provides the best range of property values on a particular property?
comparative market analysis
A valuation method requested by lenders involved in short sales of distressed property is
called a
broker's price opinion
Mary is preparing a CMA for her client. The subject property has 2 bathrooms, which both
contain a toilet, shower, bathtub, and sink. Her comparable property has two bathrooms
also. One bathroom contains a bathtub, shower, sink, and toilet, while the second only
contains a toilet and sink. What adjustment should Mary make?
Add 1/2 bath to the comparable property
When a broker or sales associate is showing a list of comparables to a client, which of the
following is advisable?
hide the names of the sellers and part of the address to protect the privacy of the previous sellers
or owners whose property did not sell.
What is the gross living area of a structure that measures 70' x 80' and includes a garage that
measures 25' x 10'?
Square Feet of Gross Living Space - Measure the Structure
70' x 80' = 5600 square footage
25' x 10' = 250 garage measures
5600 square footage - 250 garage measures = 5350 gross living area
Sets found in the same folder