What is a comparative market analysis?

A comparative market analysis, or CMA, is a tool used by real estate agents, lenders, and homeowners to determine the market value of a particular residential property. The CMA usually includes a list of recent sales of comparable properties in the area, as well as data about current listings. It is important to note that the CMA is not an official appraisal, but rather a tool to give an estimate of a property’s value. The CMA process begins by gathering data from public records and other sources to gather information about the sale prices of equivalent homes in the area. This data is compared to the features of the subject property, such as square footage, number of bedrooms and bathrooms, lot size, amenities, and condition. The agent can then determine an estimated value of the subject property. This estimated value is what is typically used in negotiations and in establishing asking prices for residential properties. It is important to note that CMAs can vary significantly. This is due to the inconsistent values assigned to features of the properties, as well as the sheer number of variables used in the CMA process. Therefore, consulting multiple CMAs is recommended before making a final decision on the value of a residential property.

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What is a comparative market analysis?

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