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What is the fundamental difference between a Comparative Market Analysis (CMA) and a formal appraisal?

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2026 Statistics

Key Facts: PSA Exam

100

Free Practice Questions

OpenExamPrep

1 Day

Course Length

NAR

70%

Passing Score

NAR

$159

Typical Course Tuition

NAR / providers

25% / 15% / 10%

Gross / Net / Line Adjustment Limits

Appraisal guidelines

90-180 days

Standard Sold-Comp Recency

PSA / appraisal practice

PSA is a NAR certification earned in a one-day course plus a final assessment, focused narrowly on pricing competence: building defensible CMAs, working effectively with appraisers, and deploying the right pricing strategy for the current market. PSA designees can analyze comp data, support paired-sales adjustments, navigate low-appraisal scenarios via Reconsideration of Value, recognize appraisal bias risk, and translate absorption rate, days on market, and list-to-sale ratio into seller-ready strategy.

Sample PSA Practice Questions

Try these sample questions to test your PSA exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1What is the fundamental difference between a Comparative Market Analysis (CMA) and a formal appraisal?
A.A CMA uses fewer comparable sales than an appraisal
B.A CMA is a real estate licensee's opinion of value, while an appraisal is a state-licensed appraiser's certified valuation
C.A CMA is only used for residential properties; appraisals are for commercial
D.A CMA must follow USPAP, while an appraisal does not
Explanation: A CMA is an opinion of value prepared by a real estate licensee using market data to help sellers price a listing or buyers craft an offer. An appraisal is a certified valuation produced by a state-licensed or certified appraiser following USPAP. REALTORS cannot legally produce appraisals without an appraiser license, so a CMA must always be presented as an opinion of value, not an appraisal.
2A PSA designee preparing a CMA for a suburban listing is considering the appropriate search radius for comparable sales. Which radius is generally recommended for a typical suburban property?
A.0.1 miles
B.0.5 miles
C.1 mile
D.5 miles
Explanation: Typical search radii for CMA comparables are about 0.25 miles in dense urban areas, 0.5 miles in suburban neighborhoods, and up to 1 mile (or more) in rural areas. The goal is to find comps in the same market area as the subject. Tightening or widening the radius depends on neighborhood boundaries, school zones, and how active the local market is.
3When pulling sold comparables for a CMA, what is the most commonly recommended maximum age of the sales?
A.30 days
B.90 to 180 days
C.1 year
D.2 years
Explanation: Sold comparables are typically pulled from the most recent 90 to 180 days. Sales older than six months may not reflect current market conditions and require a market conditions (time) adjustment. In slow markets you may need to extend to 12 months, but you should disclose that and adjust accordingly.
4Which of the following BEST describes the appropriate mix of comparables for a residential CMA?
A.Only sold comparables, ideally 10 or more
B.3 to 6 active listings plus 3 to 6 sold comparables, with pending and expired listings as supporting data
C.Only active listings to reflect current asking prices
D.One pending sale and one expired listing
Explanation: A robust CMA generally includes 3 to 6 active listings (your competition), 3 to 6 sold comparables (proven market value), plus pending and expired listings as supporting evidence. Actives show what buyers are seeing now; solds show what they have been willing to pay; pendings hint at the direction; expireds show price points the market has rejected.
5When selecting comparables, which characteristic is MOST important to match closely with the subject property?
A.Listing agent's brokerage
B.Date the property was originally built
C.Location, including school district and neighborhood boundary
D.Type of HVAC system installed
Explanation: Location is the single most important comp-selection criterion. Two physically similar homes can sell for very different prices when separated by a school boundary, flood zone, or neighborhood line. After location, similar size (GLA), age, condition, and style follow in importance.
6A PSA designee is comparing the subject property to a sold comp. The subject has a finished basement, but the comp does not. To bring the comp in line with the subject, the agent should:
A.Adjust the comp's sale price DOWN
B.Adjust the comp's sale price UP
C.Discard the comp because it lacks a basement
D.Make no adjustment, since basements are too subjective
Explanation: The rule is: adjust the COMP, not the subject. If the subject is superior to the comp (subject has the basement, comp does not), adjust the comp UP to match the subject. If the comp is superior, adjust the comp DOWN. The mnemonic 'CIA — Comp Inferior, Add' helps remember this.
7A CMA shows a comp with a 3-car garage; the subject has a 2-car garage. Following standard adjustment direction, the agent should:
A.Adjust the comp UP because more garage stalls are better
B.Adjust the comp DOWN because the comp is superior to the subject
C.Make no adjustment because garages are not comp-relevant
D.Adjust the subject DOWN to match the comp
Explanation: The comp is superior (3-car garage vs. 2-car), so the comp's sale price is adjusted DOWN to estimate what it would have sold for with only a 2-car garage. Typical garage stall adjustments are $5,000 to $15,000 per stall depending on the market.
8Which method does a PSA designee use to estimate the dollar value of a single feature, such as a fireplace or extra bath, by comparing pairs of otherwise similar sold properties?
A.Income capitalization
B.Cost approach
C.Paired-sales analysis (matched-pair analysis)
D.Gross rent multiplier
Explanation: Paired-sales (or matched-pair) analysis isolates the value of a single feature by finding two otherwise similar sales that differ only in that feature. The price difference becomes the adjustment. It is the foundation of credible CMA adjustments and the same technique appraisers use to support adjustments in the sales comparison approach.
9A subject property has 2,000 sq ft of gross living area (GLA); a comp has 2,200 sq ft. Using a $75/sq ft GLA adjustment, what dollar adjustment is made to the comp?
A.Add $15,000 to the comp's sale price
B.Subtract $15,000 from the comp's sale price
C.Add $200 to the comp's sale price
D.No adjustment because GLA is not adjusted
Explanation: The comp is 200 sq ft larger than the subject, so the comp is superior in size. 200 × $75 = $15,000, subtracted from the comp's sale price. GLA adjustments typically run $50 to $200 per square foot depending on the market and price tier.
10An appraiser typically values finished basement square footage at approximately what percentage of the above-grade GLA rate?
A.10 percent
B.25 percent
C.50 percent
D.100 percent
Explanation: Below-grade finished space (typically a basement) is conventionally adjusted at roughly 50% of the above-grade GLA rate. The market sees finished basement square footage as less valuable than above-grade living area, partly because it lacks natural light and partly because lenders weight it less. The exact rate varies by market.

About the PSA Exam

The Pricing Strategy Advisor (PSA) is a NAR certification that develops a REALTOR's competence in preparing comparative market analyses (CMAs), collaborating with appraisers, and pricing properties strategically across different market conditions. The program is delivered as a one-day course followed by a final assessment, and focuses on the practical pricing decisions REALTORS face on every listing and offer.

Questions

100 scored questions

Time Limit

1 hour

Passing Score

70%

Exam Fee

$159 + course materials (NAR)

PSA Exam Content Outline

25%

CMA Methodology and Comp Selection

Definition of a CMA vs. an appraisal, comp-selection rules (3-6 active and 3-6 sold within 90-180 days, search radius by area type), use of pendings and expireds, and reconciling adjusted values into a recommended price

20%

Adjustments and Reconciliation

Adjustment direction (CIA: comp inferior, add), paired-sales analysis, GLA / basement / garage / fireplace / view / lot-size adjustments, dollar vs. percentage adjustments, gross-25 / net-15 / line-10 limits, and weighting comps in final reconciliation

15%

Working with Appraisers

Three approaches to value (sales comparison, cost, income), USPAP, comp packages for appraiser visits, appraisal contingency, low-appraisal options, Reconsideration of Value process, appraisal bias under the Fair Housing Act, and final reconciliation

15%

Pricing Strategy by Market Conditions

Reading market signals (absorption rate, days on market, list-to-sale ratio, median vs. price-per-sf), choosing strategy by market type (seller's, balanced, buyer's), bidding-war and escalation strategies, and the cost of overpricing

10%

Pricing Distressed and Unique Properties

REO, short sale, probate, and foreclosure-auction pricing dynamics; valuing waterfront, equestrian, log home, and luxury properties using wider comp searches and the cost approach when comps are thin

10%

Communicating Value to Clients

Listing-presentation framework (goals, market, CMA, strategy), price-range presentation, seller education on overpricing risk, buyer-CMA practice, documenting pricing decisions, and avoiding outcome guarantees

5%

Code of Ethics and Risk

Article 11 competence, accurate CMA labeling (never call it an appraisal), state appraiser-licensing limits, federally-related transactions, and CMA documentation that minimizes liability

How to Pass the PSA Exam

What You Need to Know

  • Passing score: 70%
  • Exam length: 100 questions
  • Time limit: 1 hour
  • Exam fee: $159 + course materials

Keys to Passing

  • Complete 500+ practice questions
  • Score 80%+ consistently before scheduling
  • Focus on highest-weighted sections
  • Use our AI tutor for tough concepts

PSA Study Tips from Top Performers

1Master the CIA mnemonic for adjustment direction: Comp Inferior, Add (and the reverse — comp superior, subtract)
2Memorize standard appraisal adjustment limits: line ≤ 10%, net ≤ 15%, gross ≤ 25%, and basement at ~50% of GLA rate
3Know the three approaches to value cold — sales comparison for residential, cost for new/unique, income for rental — and when each dominates final reconciliation
4Practice calculating absorption rate, days on market, and list-to-sale ratio so market-condition diagnostics become automatic
5Understand appraisal bias under the Fair Housing Act and the DOJ enforcement context — never include demographic descriptors in a comp package

Frequently Asked Questions

What is the PSA certification?

The Pricing Strategy Advisor (PSA) is a NAR certification focused specifically on pricing competence — preparing defensible comparative market analyses, collaborating with appraisers, and applying pricing strategies that match current market conditions. It is delivered as a one-day course (typically 6-8 hours) followed by a final assessment. PSA is a certification, not a designation, but it appears alongside designations like CRS and ABR in many REALTOR profiles.

How is the PSA exam structured?

The PSA assessment is a final-course exam taken after completing the one-day PSA course. It covers CMA methodology, adjustments and reconciliation, working with appraisers, pricing strategy by market conditions, distressed and unique properties, value communication, and Code of Ethics topics. A 70% score is required to pass and earn the certification.

What does PSA cost?

The PSA course tuition is approximately $159 (varies by provider and delivery format) plus the cost of course materials. There is no separate annual designation fee specific to PSA, but candidates must maintain active REALTOR membership through their local board and NAR. Course providers may offer the program online or in-person; pricing varies.

What is the difference between a CMA and an appraisal?

A CMA is a real estate licensee's opinion of value prepared from market data — it is the day-to-day pricing tool REALTORS use for listings and offers. An appraisal is a certified valuation produced by a state-licensed or certified appraiser following the Uniform Standards of Professional Appraisal Practice (USPAP). REALTORS cannot legally produce appraisals without an appraiser license. Federally related mortgage transactions almost always require a true appraisal, not a CMA.

How should a REALTOR respond to a low appraisal?

There are four practical responses to a low appraisal: (1) renegotiate the contract price downward, (2) the buyer brings additional cash to bridge the gap (an 'appraisal gap'), (3) submit a Reconsideration of Value (ROV) to the lender with new comps or factual corrections, or (4) terminate the contract under the appraisal contingency. The first step is always to review the appraisal carefully for factual errors before deciding which path to take.

Who should earn the PSA certification?

PSA is most valuable for active listing agents who want stronger CMA skills, buyer's agents who need to defend offer prices in negotiations, and any REALTOR working in markets with frequent low appraisals or significant distressed-property activity. It is also a strong complement to broader designations like CRS, ABR, or SRS, since pricing is the foundation skill underlying every transaction.