To the lay person, a CMA means nothing or what about COE, or maybe just the term escrow? I’m guilty of blurting out terms to clients who may not know what I’m talking about and are too shy to ask. So, I’ve decided to break things down a bit; 1. to educate you and 2. to remind myself that not everyone is up on the lingo.
Hawaii Real Estate Terminology
1. CMA – Comparative Market Analysis – is basically a report that suggests what your home is worth, or if you are making an offer on a home, what other homes in the neighborhood are worth. To a seller, this helps determine your list price and to a buyer, this helps you decide on how much you are willing to pay for a home.
The CMA includes;
- Active listings
- Pending (in escrow) listings
- Sold listings
- Some may include expired, withdrawn or cancelled listings
These listings may be important because it shows you what homes are not selling for. The home in question is compared to others in the area according to size, amenities, condition, location, lot size, age, etc. These are usually more precise in analyzing condo and less so with homes as there are more variables to consider.
2. COE – basically means close of escrow. This is the amount of time that the buyer and seller negotiate to culminate the transaction. Transactions involving only cash could close quicker than transactions involving lender financing.
Sellers are usually concerned with how much time is needed to find a replacement property, pack, and move. Buyers are concerned with the amount of move out time to give to landlords and if the property needs some kind of rehab, a quicker close would get them in sooner.
3. Escrow – has many meanings. It is a noun and a verb. It is technically a neutral third party who gathers documents, funds, etc. from the parties involved and coordinates the transfer of property from Seller to Buyer. Not all states have an escrow as we know it in Hawaii.
On the East Coast, the parties involved (buyer, buyer’s agent, seller, seller’s agent, attorneys) meet at an attorney’s office where documents are signed, funds and keys are transferred. That is the official closing.
Here in Hawaii, there is no official closing meeting. “Escrow” handles the paperwork, requests that the Buyer comes into the office to sign loan documents, those documents get returned to the lender, funds get sent to the title company and property deeds get sent to Oahu for recording. This is a nutshell version of the term, but it’s a start.
This is just the tip of the iceberg, so I will cover more terms in the coming days, but this is a start for now. Have a term that you don’t understand? Ask Ken!