Comparative Market Analysis (CMA)

  • Comparative market analysis: pricing tool used by real estate licensee to estimate the probable selling price of a property by comparing it to recently sold, active, and expired listings in the area

    • Not an appraisal - it’s an informal estimate of market value and cannot be referred to as an appraisal under any circumstance

    • Purpose:

      • Help sellers set a competitive listing price

      • Help buyers make a reasonable offer

      • Help agents justify pricing strategy

  • CMAs vs. appraisals, vs BPOs

    Feature 

    CMA 

    Appraisal 

    BPO 

    Who prepares 

    Real estate agent 

    Licensed appraiser 

    Agent or broker 

    Legal status 

    Informal estimate 

    Legal opinion of value 

    Usually for lender 

    Regulated by 

    Real estate law 

    USPAP 

    May require special license 

    Acceptable in lending? 

    No 

    Yes 

    Yes (in some cases) 

    Used for 

    Pricing strategy 

    Loans, divorce, tax, estate 

    Short sales, REOs 

  • What’s included?

    Type 

    Why it’s important 

    Recently sold 

    Shows what buyers have actually paid 

    Active listings 

    Shows current competition 

    Expired listings 

    Warns what buyers won’t pay (often overpriced) 

  • CMA property features to consider

    • Square footage

    • Lot size

    • Bedrooms/bathrooms

    • Garage size

    • Basement (finished/unfinished)

    • Condition

    • Age

    • Location/view

    • Upgrade/renovations

  • Sample CMA structure

    • Subject property details

    • 3-5 recent comparable sales

    • 3-5 current active listings

    • Any expired/withdrawn listings

    • Adjustments for major differences

    • Recommended pricing range for listings