Building the CMA While the Seller Clings to a Higher Number
Priya is competing for a listing at 2214 Maple Row: 1,800 square feet, 4BR/2.5BA, two-car garage, updated kitchen, no basement, 0.22-acre lot backing to a park. Her broker's files support these adjustments: $75 per square foot of gross living area, $9,000 per garage bay, $14,000 for an updated kitchen, and $18,000 for backing to a busy commercial lot. The market has been flat for a year, so no time adjustment is needed. Three closed comparables: (A) 1,760 sq ft, 3BR/2BA, one-car garage, original kitchen, sold $312,000; (B) 1,940 sq ft, 4BR/2.5BA, two-car garage, updated kitchen, sold $352,000, one block away; (C) 1,800 sq ft, 4BR/2.5BA, two-car garage, updated kitchen, sold $325,000, backing to a shopping center with delivery traffic. The seller wants to list at $359,900 and points to an online estimate of $352,000.
1. Adjust each comparable and derive a supported value range and a recommended list price.
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Adjust the comps to the subject (adjust the comp, not the subject):
| Comp | Sale price | GLA | Garage | Kitchen | Location | Adjusted |
|---|---|---|---|---|---|---|
| A | $312,000 | +40 sf × $75 = +$3,000 | +$9,000 (1→2 bays) | +$14,000 (original→updated) | - | $338,000 |
| B | $352,000 | −140 sf × $75 = −$10,500 | $0 | $0 | - | $341,500 |
| C | $325,000 | $0 | $0 | $0 | +$18,000 (busy commercial → park) | $343,000 |
Indicated range: $338,000–$343,000, clustered within 1.5%. That tight a cluster is the strongest signal in the analysis - no comp needs to be discarded, and weight can be spread fairly evenly, with B and C slightly favored for matching bed/bath count.
Recommended list price: $339,900–$342,900. Listing at the top of the supported range is defensible in a flat market; listing above it is a pricing error dressed up as negotiating room.
Check the reasoning, not just the math: every adjustment moves the comp toward the subject. Comp C is inferior because of its location, so it is adjusted up - an agent who adjusts it down has the logic backwards and will underprice the listing by $36,000.
2. The seller insists on $359,900 and says, "We can always come down." How should Priya respond?
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Show the cost of being wrong in days and dollars, not in opinions.
- The gap is $17,000–$21,000 above every adjusted comp. Buyers and their agents run the same three comps. A listing at $359,900 does not get negotiated down to $342,000; it gets skipped by the buyers who could actually pay $342,000.
- The stale-listing cycle: weeks 1–3 bring the traffic; after that, showings collapse. A price cut in week 6 typically lands below where a correct day-one price would have traded, because buyers read a reduction as a signal and offer against it.
- Appraisal exposure: a $359,900 contract financed at 96.5% will very likely appraise near $340,000, forcing a $20,000 renegotiation at the worst possible moment - after the seller has already committed to a move.
- What the seller's mortgage balance or hoped-for number has to do with it: nothing. Price is set by what buyers will pay, and Priya should say so plainly and put it in writing.
- A workable compromise: list at $344,900 with a written agreement to review showing activity at 14 days and 30 days with pre-agreed review triggers. That gives the seller a plan without endorsing a number the market does not support.
3. The seller asks Priya to advertise the home as "priced $18,000 below appraised value" based on the online estimate, and asks her to skip the CMA and just use the estimate in the MLS. How should she handle both requests?
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Decline both, and explain why in terms the seller can use.
- "Below appraised value" is a misrepresentation. An online automated estimate is not an appraisal, and no appraisal exists. Advertising a false basis of value exposes Priya to a consumer-fraud claim and an IDFPR disciplinary complaint, and it hands the buyer's agent a negotiating weapon the moment the real appraisal comes in lower.
- A CMA is not an appraisal either. Priya may prepare and present a comparative market analysis for listing purposes, but she may not hold it out as an appraisal or perform appraisal services - that requires an Illinois appraiser credential. The CMA should be labeled as a broker price opinion of value for listing purposes.
- Skipping the CMA is not a neutral choice. The MLS listing data and the recommended price are the licensee's professional product; adopting a third-party estimate as her own opinion means she is warranting a number she did not support. If the seller insists, the honest position is: "I'll show you the estimate alongside my analysis, but the price recommendation I sign my name to has to come from the closed sales."
- Paper trail: document that the analysis was presented and that the final list price was the seller's decision. That record is the licensee's protection if the property sits.