This Is The New CMA (And It’s Way Better)
If you’re fortunate enough to reach the “let’s meet” stage of a possible listing, you have one shot at impressing your future client.
And with the record amount of equity homeowners gained the past year (a whopping $56,700 on average), there’s a lot of incentive for sellers to make a move.
So, while every other agent offers a comparative market analysis (CMA), this is your chance to really set yourself apart and inform your clients about their buying power.
It’s time to ditch the CMA and opt for a Professional Equity Assessment Report, or PEAR.
Here’s how to do it.
What is a Professional Equity Assessment Report?
A Professional Equity Assessment Report is a simple way for real estate agents to determine the cash value of a seller’s home. No guessing, no lengthy calls with the bank or a lender. With a simple twist, you’re not only telling them the estimated value of their home, but also proving yourself as a trusted advisor.
Plus, the fact that there aren’t enough homes on the market to keep up with buyer demand, many homeowners have tremendous selling power in this competitive market.
Dr. Frank Nothaft, Chief Economist at CoreLogic, explains it like this:
“Home price growth is the principal driver of home equity creation. The CoreLogic Home Price Index reported home prices were up 17.7% for the past 12 months ending September, spurring the record gains in home equity wealth.”
Given this information, a PEAR is a powerful and effective tool for agents to use that not only impresses but also inspires homeowners to take action.
Here’s how you do it.
Step 1: Offer a PEAR
Whether you’re sending a follow-up email or setting up the first meeting with a potential client, let them know that you offer a complimentary Professional Equity Assessment Report.
Add it to your sales scripts, create a landing page, or include it in real estate marketing materials. However you present it, make sure they know why this is a better tool than a CMA, and that you’re unique for offering it.
Remember, as great as it may be to send via email, it would be especially powerful as a walkthrough presentation, whether in-person or virtually. Plus, you can save an extra step by downloading our free customizable PowerPoint template.
Step 2: Ask for Their Mortgage Balance
Selling a home can be a sensitive time for most homeowners. It’s only human to become emotionally attached, and passions can run wild. Add the chaos of 2021 into it, and a lot of potential sellers have mixed feelings about the whole process.
Therefore, asking for someone’s mortgage statement may seem like a personal matter. To overcome this fear, it’s best to present it as a matter of fact.
When setting up the first meeting, tell them that you want to do a Professional Equity Assessment Report of their home. Tell them that in order to do this, you will need their current mortgage balance and that they can find this information on their last statement.
Chances are, the seller will jump at the chance to learn what their home equity is and not make a big to-do of giving up their mortgage information.
Step 3: Establish the Approximate Value of Their Home
Running the comps of recently sold homes in the area will give you a good idea of what their property is worth. If you’re able to visit the home, you can further evaluate this and offer an estimate.
If you are unable to get into the home but still want to offer a PEAR, we recommend stressing that this is an educated estimate, and you’ll get a better understanding of the home value once you safely view the home.
Step 4: Do the Math
It doesn’t get much simpler than this. By taking the estimated home price (ex. $150,000) and subtracting their mortgage balance (ex. $100,000) you can decipher that they have about $50,000 of equity in their home.
This can be a valuable tool for figuring out the listing price as well as what they can purchase a new home for. Given today’s current seller’s market, homes are frequently going over asking with multiple bids, which would, in turn, increase the seller’s equity.
That delivers an unmatchable incentive to move hesitant sellers off the fence.
The #1 job of any real estate agent is to be a trusted expert.
Providing a Professional Equity Assessment Report to clients is a great way to build rapport, set yourself apart from your competitors and get the listing.
When every other agent only shows up with a list of comps, you are the agent that goes above and beyond to make sure your clients are educated and prepared for the selling process.
We’ve made this even easier by creating a customizable PEAR presentation that you can download and share with your clients.
Add in your contact information, branding and the seller’s information and you’re ready to go. You can download the PEAR presentation template here.
But why stop there? Differentiate yourself from the competition with even more personalized content. Start a free trial of the KCM Membership today.