Many real estate professionals ask me what they can do to help stem the tide of foreclosures and stabilize the housing market in their area. One way you can help is by offering a free CMA (Comparative Market Analysis) to homeowners who are struggling to make their house payments. (A CMA is sometimes referred to as BPO – Broker’s Price Opinion.)

Let homeowners in your area know how valuable a CMA can be, regardless of whether they plan on selling or keeping their home. The CMA together with the principal balances on the various loans attached to the home enable the homeowner to estimate their equity. Because of this, the CMA is key document to have for evaluating and pursuing a number of foreclosure alternatives:

Refinancing: The CMA can help a mortgage broker calculate the all-important LTV to see whether the homeowners would likely qualify for loan to refinance their mortgage and perhaps even consolidate debt.

Loan modification: When homeowners can prove that they are upside-down in their current mortgage (owing more on the home than they can sell it for), lenders have much more to lose by foreclosing and much more to gain from a loan modification. A current CMA can often convince a reluctant lender to approve a loan modification request.

Short sales: Sometimes homeowners want to get out from under a property they can no longer afford, but they cannot sell it for enough to pay back all the money they owe on it. Lenders may be willing to accept less than they are owed to allow the homeowners to sell and walk away debt-free, but they will want to see a CMA before agreeing to such a proposition.

Short refinance: Like a short sale, a short refinance (short refi) calls for the lender to accept less than the full balance due on the loan, so the homeowners can refinance into new mortgage with a lower balance and lower monthly payments. Before agreeing to a short refi, lenders want to see a CMA to make sure the property is truly worth less than what's owed on it.

Principal forbearance: A principal forbearance is sort of a cross between a short refi and a loan modification, but the lender does not completely forgive the difference between what's owed on the property and its market value. Instead, the lender agrees to collect the difference later – when the homeowners sell or refinance the property. Like a short refi, the new monthly payment is calculated on a lower principal balance (based on the property's market value), resulting in a lower monthly payment. The CMA is key for establishing the property's true market value.

Listing and selling: Rarely do homeowners think their property is worth less than its true market value, but it happens occasionally. By presenting homeowners with a CMA, you provide them with a valuable piece of information for considering another option – listing and selling the home to cash out any equity they may have in it and move to more affordable accommodations.

By providing distressed homeowners in your area with free CMAs and presenting them with a menu of foreclosure options from which to choose, you play an important role in keeping homeowners in their homes and helping your market rebound. In addition, when these homeowners you have helped decide to sell their home or buy a new one, they will never forget the real estate professional who reached out to help during their hour of need.

Published: April 6, 2009

Use of this article without permission is a violation of federal copyright laws.

Ralph R. Roberts, CRS, GRI is an award-winning and internationally recognized real estate agent, author, coach, and speaker. Throughout his career, Ralph has proven his commitment to helping other real estate and sales professionals build upon their past and present success, grow and expand their businesses, and provide a rich and rewarding future for themselves, their customers, their employees, and their families. As president and CEO of Ralph Roberts Realty, Ralph has personally helped thousands of consumers realize their dream of homeownership. While selling over 10,000 homes (and buying and selling over 3,000 investment properties) throughout his 30-year career, Ralph has made the time to mentor and coach hundreds of professionals in real estate, sales, and a host of other fields. Ralph is a recognized authority on Real Estate and Mortgage Fraud; Residential Real Estate; Personal Salesmanship; Sales Force and Office Management, Motivation, Design, and Team Building; and Foreclosure Self-Defense and Loan Modification, fields in which he has demonstrated his commitment to preserving the American Dream of Homeownership. Ralph's numerous websites, blogs, seminars, and speaking engagements engage, entertain, and educate both consumers and professionals. Ralph is also an accomplished author with several successful titles to his credit, including: Power Teams: The Complete Guide to Building and Managing a Winning Real Estate Agent Team Financing Real Estate Investments For Dummies (John Wiley & Sons) Mortgage Myths: 77 Secrets That Will Save You Thousands on Home Financing (John Wiley & Sons) Foreclosure Self-Defense For Dummies (John Wiley & Sons) Protect Yourself from Real Estate and Mortgage Fraud: Preserving the American Dream of Homeownership (Kaplan) Foreclosure Investing For Dummies (John Wiley & Sons) Foreclosure Myths: 77 Secrets to Saving Thousands on Distressed Properties (John Wiley & Sons) Advanced Selling For Dummies (John Wiley & Sons) Flipping Houses For Dummies 52 Weeks of Sales Success (John Wiley & Sons) Walk Like a Giant, Sell Like a Madman (John Wiley & Sons) Cross-Cultural Selling For Dummies (John Wiley & Sons) To learn more about Ralph, visit AboutRalph.com, check out his daily insights on real estate and mortgage fraud prevention at FlippingFrenzy.com, or visit his latest blog dedicated to helping distressed homeowners fight foreclosure, KeepMyHouse.com. You can reach Ralph at or by calling (586) 751-0000.