Choosing a market value - How are these values calculated?

Steps in choosing a Market Value and understanding how are these benchmark values calculated.

You’ll start by choosing between Active, Sold ,Inactive listings or them altogether. Here's a breakdown of the most common MLS listing statuses:
- Active listings are properties that are currently available for sale. These are the listings that homebuyers would be most interested in.
- Sold listings are properties that have closed and are no longer available for sale. Sold listings are used to help determine the fair market value of a property.
- Inactive listings are properties that were listed for sale, but the listing agreement has ended. This can happen for various reasons, such as the property not selling within a certain period of time, the seller changing their mind, or the agent not fulfilling their duties. This classification would include listings that have been cancelled, expired, withdrawn, etc.
The values you see at the right side are based on your comparables. In this case, there’s only one Active so the values are all the same.
Note : The Average, Median, Minimum and Maximum values are based on your comparables AFTER the adjustment price impact.
Let's say, you want to calculate these benchmarks based on your your Active and Sold listing selection. You’ll see that the values are now changed. Now the benchmark calculations are based on the selected Active listings and Sold listings.

Ranged Vs. Single Vs. No Market Value

A common question we get asked is... "Which option should I use?" Or "When would I want to use this option?" Below, we have outlined a description of each option and when may be an appropriate time to use each option.

Ranged Market Value - The high and low values based on your comparables. You can change modify these values to something that you feel is more appropriate and suited to your client. This is the most popular option for CMA proposals, as you can provide your clients with different options, approaches, expectations based on your expertise. This leaves room for more open discussion and conversation.
Single Market Value - The median or average value based on your comparables. Again, you can modify this value to something that you feel is more appropriate for your client. However, this option leaves less room for discussion and therefore we would recommend not using this option for proposals. However, let's say that you have already agreed to an asking price with your seller, we can use Top CMA as more of a way to negotiate with the buyer agent to justify the asking price. You can also use Top CMA to explain your marketing plan to your client to achieve a sale at the price you have agreed to with your client.
No Market Value - Top CMA is often used to prepare "information packages" for buyers and sellers... Let's say that you have a new seller lead and you want to prepare some information for them. At this point in the sales cycle, you may have limited or no information about the subject property. This way, we can omit the subject property from our report as well as our market value. This provides you with the ability to prepare some in-depth detail about potentially similar properties which will increase your value perception and build credibility with your client. Furthermore, Top CMA is a great way to share sold data with your client - Something that they can't have access to without your service.

Understanding how these values are calculated.

The low, high, median and average benchmarks are based on the following calculations :

Average - The sum of all values divided by the quantity of your listing.
Median - Middle value that separates the lower and the higher values
Minimum - Smallest value
Maximum - Highest value

Calculating Average Vs. Median

When analyzing a set of numerical data, you may come across two terms known as "average" and "median." Both of these terms represent measures of central tendency, but they are calculated differently and can provide different insights into the data.

How is the average value calculated?

The average, also known as the mean, is calculated by summing up all the values in a data set and dividing by the total number of values. For example, let’s say we have a data set consisting of the following five numbers: 10, 12, 15, 20, 25. To calculate the average, we add up all these figures like so:

10 + 12 + 15 + 20 + 25 = 82

Then we divide this total by the number of figures in the data set (in this case, 5) to get the average value:

82 / 5 = 16.4

Therefore, the average value of our data set is 16.4.

How is the median value calculated?

The median is calculated by finding the middle value in a data set. To do this, you first need to arrange the values in the data set in order from least to greatest or vice versa. For example, let’s use the same data set as before: 10, 12, 15, 20, 25.

To find the median, we arrange the numbers in order:

Since we have an odd number of values here, the median is the middle number, which is 15 in this case. However, if we had an even number of values, the median would be the average of the two middle values.