The CMA Grid: Adjustments, Reconciliation, and the Seller Who Wants a Bigger Number
You are preparing a listing presentation for a 1,450-square-foot, three-bedroom, 1.5-bath ranch with a one-car garage on a quiet interior street. Your office's supported adjustment rates are $55 per square foot of gross living area, $6,000 per half bath, $12,000 per garage stall, and $10,000 for a location on a busy through-street. The local market has been appreciating about 0.5% per month.
Comp A: $242,000, closed 2 months ago, 1,320 sf, 2 full baths, no garage. Comp B: $265,000, closed 5 months ago, 1,560 sf, 2.5 baths, one-car garage. Comp C: $238,500, closed 1 month ago, 1,450 sf, 1.5 baths, one-car garage, backs onto a heavily traveled road.
The seller announces that he 'needs' $265,000 and asks you to prepare the CMA at that number and to 'call it an appraisal' for his refinance.
1. Adjust each comparable to the subject and reconcile a supported value range.
Read the worked answer
Adjusting convention: adjust the comparable to make it equivalent to the subject - if the comp is better, subtract; if the comp is worse, add.
Comp A - $242,000
- Market conditions: +2 months × 0.5% = +1% → +$2,420 → $244,420
- GLA: subject 1,450 vs 1,320 → +130 sf × $55 = +$7,150 → $251,570
- Baths: comp has 2 full vs subject 1.5 → comp superior by one half bath = −$6,000 → $245,570
- Garage: comp none, subject one-car = +$12,000 → $257,570
Comp B - $265,000
- Market conditions: +5 months × 0.5% = +2.5% → +$6,625 → $271,625
- GLA: comp 1,560 vs 1,450 → comp superior by 110 sf × $55 = −$6,050 → $265,575
- Baths: comp 2.5 vs 1.5 → −$12,000 → $253,575
Comp C - $238,500
- Market conditions: +1 month × 0.5% = +0.5% → +$1,192.50 → $239,692.50
- GLA, baths, garage: identical, no adjustment
- Location: comp on a busy through-street, inferior → +$10,000 → $249,692.50
Reconciliation. Adjusted range: $249,700 to $257,600.
- Comp C is the most recent and the most similar in physical terms, but its entire adjustment rests on one subjective line item (traffic).
- Comp A required the largest total adjustment but the closest match on condition and street; its garage and GLA adjustments are well supported.
- Comp B is the oldest sale carrying the largest condition adjustment and the highest gross adjustment - weight it least.
Supported value: roughly $252,000–$255,000. A list price of $254,900 with an expected settlement near $250,000 is defensible; that range should be presented with the grid, not asserted.
2. How do you respond to the seller's two requests - the $265,000 "needed" number and calling this an appraisal for his refinance?
Read the worked answer
On the $265,000. A seller's mortgage balance, proceeds target, or timeline is not evidence of value - it is a financing problem, and pricing to it has predictable consequences:
- $265,000 sits at the top of a range where the highest adjusted comp is $257,570 and the best-weighted value is around $253,000. That is roughly a 5% premium.
- Buyers search in $5,000–$10,000 bands. The property will be shown against genuinely superior houses at the same price and will lose those showings.
- If it goes under contract at an inflated price, the buyer's appraisal is likely to land near $250,000, creating an appraisal gap and a renegotiation from a position of weakness - after the seller has already moved out mentally.
- Days on market compounds: a stale listing invites low offers and "what's wrong with it" questions.
The honest response: show the grid, show what happens at $265,000 (no showings in the band, high DOM, appraisal risk), and offer a written price-reduction plan with dates tied to showing counts. If the seller insists on $265,000, document the recommendation and the seller's decision - the listing agreement is his to control, the professional advice is yours to give.
On "call it an appraisal." You cannot. A comparative market analysis or broker price opinion is a licensed activity a salesperson may perform to help set a list price. An appraisal - particularly for a refinance that will be sold to a lender, a federally related transaction - must be performed by a Pennsylvania state-certified or state-licensed appraiser. Calling a CMA an appraisal is both a misrepresentation and a licensing exposure, and the lender will order its own appraisal anyway.
Say instead: "This is a broker price opinion prepared to help you price the listing. Your lender will send a certified appraiser, who will look at the same closed sales and probably reach a similar number - which is exactly why pricing to the evidence matters."