CMA (Comparative Market Analysis)
A Comparative Market Analysis (CMA) is an evaluation of similar recently sold properties (comparables) used by real estate agents to help sellers set listing prices and buyers make competitive offers.
Exam Tip
CMA = agent-prepared pricing analysis using comparables. Appraisal = licensed appraiser for lender. Know the difference!
What is a Comparative Market Analysis (CMA)?
A CMA is a report prepared by real estate agents to estimate a property's market value by analyzing recent sales of similar properties in the same area. It's a key tool for pricing listings and making informed offers.
CMA vs. Appraisal
| Factor | CMA | Appraisal |
|---|---|---|
| Prepared By | Real estate agent | Licensed appraiser |
| Purpose | Pricing guidance | Official valuation |
| Cost | Usually free | $300-$600+ |
| Required For | Listing/offers | Mortgage approval |
| Legal Standing | Informal estimate | Legal document |
Key Components of a CMA
| Component | Description |
|---|---|
| Subject Property | Property being evaluated |
| Comparable Sales | Similar properties sold recently (3-6 months) |
| Active Listings | Current competition on market |
| Pending Sales | Properties under contract |
| Expired Listings | Properties that didn't sell |
Factors in Selecting Comparables
| Factor | Ideal Range |
|---|---|
| Location | Same neighborhood/subdivision |
| Sale Date | Within 3-6 months |
| Size | Within 10-15% of square footage |
| Bedrooms/Baths | Same or similar count |
| Age | Similar construction era |
| Condition | Comparable updates/condition |
Adjustments Made in CMA
| Feature | Adjustment Example |
|---|---|
| Extra Bedroom | +$10,000-$20,000 |
| Updated Kitchen | +$15,000-$30,000 |
| Pool | +$10,000-$25,000 |
| Larger Lot | +$5,000-$15,000 |
| Inferior Condition | -$10,000-$50,000 |
How Agents Use CMAs
- Listing Presentation - Show sellers data-driven pricing
- Buyer Offers - Help buyers make competitive bids
- Market Updates - Track neighborhood values
- Negotiations - Support price discussions
Exam Alert
CMA is prepared by agents for pricing guidance. Appraisal is prepared by licensed appraisers for lending purposes. CMA uses comparables (comps) from recent sales to estimate market value.
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Related Terms
Comparables (Comps)
Real EstateComparables (comps) are recently sold properties similar to a subject property in location, size, features, and condition, used by appraisers and agents to estimate market value.
Appraisal
Real EstateAn appraisal is a professional assessment of a property's market value, typically required by lenders before approving a mortgage to ensure the loan amount is appropriate.