Buyers and sellers can check out homes on the Internet, go to open houses or your competitors to find out more about the local market, and learn pricing trends with automated valuation models. But the one thing they can't get without your help is your professionally prepared comparable (or competitive) market analysis of homes (CMA.)

The CMA is one of the greatest bargaining chips Realtors have with consumers, yet, incredibly, they routinely give away this valuable listing information hoping it will result in a sale. CMAs aren't the primary reason home sellers and buyers choose an agent, so why give them ammunition to use with a competitor or to sell their own homes without you? Isn't it time you charge for what you've been giving away?

If you haven't been hired to market a home or represent a buyer with a contract, what you are to the consumer to that point is a consultant. Consultants get paid for their knowledge, experience, opinions, and advice. As a consultant, giving free listing advice to buyers and sellers, especially when they are paying for it elsewhere as they do with AVMs, is not a business model that works very well. If they can milk the cow through the fence, why should they respect you as a professional?

If nice guys don't always finish first, what's stopping you from putting a fee on your hard-earned work? Law? Fear? Tradition? Here are some reasons to challenge your own position:

Charging for CMAs is legal in most states

Most states, including Texas, Pennsylvania, Georgia, Utah, Washington, and Nebraska, allow brokers and agents to charge for CMAs as long as they aren't represented as appraisals (a price opinion associated with lending that must be rendered by a licensed appraiser.)

Texas broker, John Huval relies on the Texas Real Estate Commission statutes:

"If a real estate licensee, for a separate fee, provides an opinion of value or comparative market analysis which does not conform with the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation, the licensee shall also provide the person for whom the opinion or analysis is prepared with a written statement containing the following language: 'THIS IS AN OPINION OF VALUE OR COMPARATIVE MARKET ANALYSIS AND SHOULD NOT BE CONSIDERED AN APPRAISAL.

"In making any decision that relies upon my work, you should know that I have not followed the guidelines for development of an appraisal or analysis contained in the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation," Huval disclaims to his customers.

He also suggests that Realtors use a variation on this disclaimer: "The material contained herein is to assist you in determining the market value of your property as of today's date, using current market conditions, and should not be construed as a formal appraisal typically rendered by a professional appraiser."

Do you get the fee or does your broker?

Some states such as Kansas are looking into payment issues surrounding charging for real estate services.

One question is whether or not preparing a CMA is an activity which requires a license. If not, do the fees for said activity go through the broker? Activities requiring a license should be run through the broker and in some states, a salesperson or associate broker is prohibited from collecting compensation for a licensed activity from anyone other than their broker.

"Based upon a recent decision by the Commission that a salesperson's collection of upfront monies for "translation services" is not a licensed activity and, therefore, does not have to be run through the broker, I'm not sure whether the Commission would say compensation from CMA/BPOs needs to be run through the broker," explains Kansas real estate commissioner Sherry C. Diel. "I think a lot of brokers in Kansas have a policy that this type of activity must be run through the broker."

While most states give a green light to charging for CMAs and BPOs, don't try it in Nevada, Delaware or West Virginia. In those states, charging for market opinions requires an appraisal license.

Getting past your fear

Julie Garton-Good, founder of the National Association of Real Estate Consultants, says, that CMAs are an important part of consulting.

"We explain to the consumer that a CMA is merely one type of fee-for-service," says Garton-Good. "and the CMA's role is properly explained to the consumer (along with the disclaimer that it's not an appraisal and that a formal appraisal may be required by a lender they subsequently work with). Once the consumer wants to obtain a CMA and pay for it (perhaps as a FSBO who is already working with a buyer) the envelope will get the proper nudge it needs."

When Garton-Good trains Realtors to become real estate consultants, she says, "This is the approach I take in the training. First, I have the agent use a formula to determine what the value of one hour of his/her professional time is absent expenses. I call this the "net professional fee". Next, we use another formula to determine what a gross hour of his/her time (with expenses) would be. The median amount for this is approx. $100-$150 per hour.

"Once the agent/consultant realizes that every hour has a gross price of $150, we begin what I call the 'walk away' process. What things can you no longer afford to do for $150 an hour? One of the first ones that comes up is free CMAs!"

Garton-Good says she teaches them to walk before they run.

"The next time the agent is at the seller's house and the seller says "put that CMA in the pile with the five others and I'll get back to you later", the agent responds with something like this," says Garton-Good. "Unlike traditional real estate agents, I work as a real estate consultant. In fact, I hold a designation called "Consumer-certified Real Estate Consultant". The information and interpretation I've provided on the CMA is my stock in trade. Just like other fee-based professionals, it took me approx. _____ (2.5?) hours to complete the CMA for you. I would be willing to leave it here with the others if you decide to list with me today, or by reimbursing my professional fee of $_________. I take cash, check, Mastercard, Visa, Am Ex, and Discover cards."

Garton-Good says this approach gets the agent comfortable with putting a value on his/her time, provides the experience of showcasing value to the consumer, and, over time, can lead him to integrating more fee-for-service approaches into his listing/selling business.

"It takes 'walk away power' and being willing to use it if the terms of your professionalism (including fees and business practices) aren't met," says Garton-Good.

She says the process works. "My surveys show that should the consumer decide to eventually list with someone, more than 60 percent of the time it will be with the fee-for-services consultant, even if the seller desires full-service brokerage. Individual personalities aside, I believe that talking about professional fees and offering options in the first place separates the fee-for-service consultant from the rest of the pack in the mind of the consumer," says Garton-Good.

Defying tradition: what is a CMA anyway?

Maryland's real estate commission has appointed a subcommittee that is looking into various legal update issues and sub-issues with respect to "so-called market analysis documents produced by real estate licensees for the public," says commissioner Syd Machat.

"The ability for an agent to be able to charge for it (a reasonable fee for services rendered) did not arise in discussions," says Machat.

But here is what did: Defining terms.

"We know the acronym "CMA" has a variety of meanings, connotations, perceptions, and ambiguities -- within local, regional, national, and international residential-commercial real estate markets," explains Machat. "For example, what does the "C" in CMA in the abbreviation alude to? Does the "C" represent the word "competitive"? Or, does the "C" represent the word "comparative."? re: brokerage services v. appraisal services? It is suggested that BOTH of the latter CMA terms are employed in state's real estate laws and regulations.

"Nonetheless our term 'comparative' appears to identify more with real estate appraisal principles and practice than with real estate brokerage activities i.e., the Market Data Approach of determining appraised or fair market value, appraiser's utilizing sold comparable sales, and so forth," he notes. "'Competitive' may suggest the operation of inventory supply & demand, market realities - motivation to buy/sell, and so forth.

Machat says there is much more to consider in the "big buzzword picture - "BPO's (Broker Price Opinion). MVA's (Market Value Analysis). AVM's (Automated Valuation Model)."

What if everyone else does it for free?

Setting yourself and your services apart from your competitors is one way to get paid for what everyone else does for free.

• You can set yourself up as a fee-for-service consultant. See NAREC.org for inspiration.
• You can explain to the consumer what your agency position is, and that until you are hired on the consumer's behalf, you have no other choice but to act as a consultant. Therefore, you charge accordingly for services the consumer wants that do not result in a listing or buyer's representation agreement. If the consumer wants your services as an agent, you will be happy to refund the cost of the CMA at closing.
• Add something special to your CMA that demonstrates your superior knowledge of the marketplace and homeselling and buying conditions, such as a corresponding interest rate analysis. (A number of in-house or mortgage company affiliates would jump at the chance to help you provide this data.) That way, you can provide additional information that your competitors don't, making your CMA more important to have in hand than your competitors.

If you are interested in charging for a CMA, find out from your local real estate commission if charging for CMAs is legal in your state. Is it an activity which requires a license? If it isn't, then you can keep the fee. If it is, you must follow your broker's policy on charging fees for CMAs.