Ever read a "how to" real estate book? They usually include a chapter on pricing. It usually goes a lot like this:

"Make sure to pick comps that are recently sold, expired, and still on the market. Then present them to show what prices are doing. For example:
'Mr & Mrs Seller, here are three homes on the market. They're priced at $180,000, $182,900, and $185,500. Here are three homes that sold recently. They sold for $172,300, $176,250, and $174,000. And here are three homes that expired. They were priced at $187,900, $189,000, and $179,000."

The remarkable thing is how tightly grouped the comps are given in example. In my experience, they NEVER sort out neatly like that: On market, overpriced; Expired, way overpriced but still in a narrow band that doesn't cross any of the others (it's a miracle!); and sold, all within a narrow band of price.

I have never had the comps fall together so well organized.

Today I did a CMA and presentation. I only had one passable comp. ONE.

Most often, all three categories are all over in price. Yes, for comparable homes. So what do you do to make your CMA price estimates reliable?

Focus heavily on the closed properties and the actives. They tend to be your best indicators.

Are you adjusting your comparables to account for variation in bedrooms, baths, square footage (including a variation for above-ground and below-ground and finished below-ground), etc.?

I teach a class on building a CMA and most variables vanish when adjusted. You'll still have a bit of range (a reflection of intangibles and negotiation between the parties).

But, generally, I see a range of about on closed properties (price ranges between $150,000-$250,000). Similar on the other categories.

And, again, generally speaking, a lack of comparables generally indicates a too narrow search. Expand the time (try to keep as close to 6 months as possible) and area. I'm in a community of 90,000 surrounded with numerous smaller communities. I rarely see a lack of comps. Often they are not identical but you can find similar kinds (maybe different subdivisions, a bit older or newer, a bit bigger or smaller, etc.).

The expireds don't tell you much about the market; they may have been overpriced, the seller's may have been unwilling to consider offers with contingencies or any one of several other reasons it is neither sold nor still active. The recent solds are your best indicator of where the market has been; from that you need to factor in what direction it is going (in spite of all the media attention to problems there are still parts of the country that are at least stable if not growing). In selecting comps try to bracket the GLA (I look for +/- 20%, a little wider if needed) and the lot size with in the market area. Market area proximity will normally expand as you move from urban to suburban to rural. From there you need to make decisions regarding adjustments such as condition, desirability of the location, amenities, room count, etc.

The active listings will tell you current competition and should be considered a check on the pricing you get from evaluating the sold comps. Adjust as needed to remain "in the running".

actives = opinion
sold = fact


that is what i tell people.

you have to be within the absorption rate to sell fast. assuming the absorption rate is 30% and homes range from 100k to 110k in 1k increments and there are 10 homes on the market, the bottom 3 priced at 101,102,103k will consistently sell faster and the other higher priced homes have a higher chance of having to lower their price or expire. in an appreciating market you can be in the higher price range and in a depreciating market you need to be in hte lower pricerange. i keep my cma down to 10 or less properties to show the seller. if you use 4 pages of comps i would equate that to showing a buyer 30 homes in one day, htey will forget what they have looked at.

got to go. i can elaborate more later.