Before a professional real estate agent accepts any property for sale, the first necessary thing they negotiate with the property owner is to set the selling price. Real estate professionals generally follow three standard methods for determining pricing, including pricing by market value comparison (CMA), cost method, and revenue method.
Among the three methods, CMA is one of the most popular being applied by professional real estate agents. So what is CMA?
According to the book entitled “Real Estate Investing”, co-authored by Eric Tyson and Robert S. Grisworld, the CMA is defined as a method that real estate agents or appraisers use to estimate property prices based on the recently sold, similar in shape and size in the immediate area.
Regional Manager at Century 21 Zillion Holding have stated that they usually choose similar properties and select at least up to five recently sold in the same area to make comparison when it comes to determining the sale price.
The following is the real experience of the real estate agents who are the regional branch managers of Century 21 Zillion Holding, where they often practice and apply the CMA approach as a first step setting the price for property owners.
Mr. Theang Vanda, Regional Manager at Century 21 Zillion Holding Company based in Sen Sok District, stated that he always chooses three to five properties of similar size and in the same location and the property which were sold at least 6 months or earlier to make a CMA comparison.
“For example, a plot of land for sale along 1982 Street, the market price of land in this area is ranging from $ 1,100 to $ 1,300 per square meter,” he said. However, the owner priced the property at $ 1,500 per square meter. “And by comparing CMA, we find that the price of the land that the client puts up for sale can be sold at an average price of $ 1,200 per square meter.”
Mrs. Man Kanika, Regional Manager at Century 21 Zillion Holding based in Dangkor District, said that she always conducts direct research and consults with property owners by comparing CMA market prices before reaching the selling price.
Kanika stated that she always chooses up to five properties in the same area that were sold between 3 and 6 months ago as a basis for comparing and analyzing the market price.
“To apply the approach, we need to go to the area around the property, asking people or the authorities there directly to know the price that is recently sold near the land. After that we could choose up to five properties sold in the last three to six months for comparison,” she said, adding that this approach can be helpful for us as professional real estate agent to determine whether the price lower or higher than current market price.
Professional agency evaluations are the only preliminary assessment. For the accurate and neutral pricing, the above professional real estate agents often rely on real estate appraisals from independent real estate appraisers like VTrust Appraisal Co., Ltd, which developed a digital platform called Indication Plus.
Indication Plus is a digital property valuation platform. It is automatically analyzed and issued a summary form of a comprehensive real estate appraisal report from a reliable online system, calculated by experts, and complies with the international professional standards.
This is the first digital real estate appraisal platform in Cambodia, allowing all users to access and submit reports anytime — easily, quickly, securely, and transparent — while users are able to obtain property prices anywhere in the country. This is a foundation on which users can make a proper decision before buying property.
English Text by: Seng Chanty