Comparative Market Analysis (CMA)

Comparative Market Analysis Definition

A Comparative Market Analysis (CMA) is an evaluation of the current market value of a property based on recent sales of home similar to the subject property. It is used by real estate agents to help determine a property’s value.

An agent would use a CMA when working with seller clients to help determine the list price. On the flip side, an agent would use the CMA to determine a buyer client’s max offer price. A CMA is performed by collecting data from similar homes in the subject property’s area referred to as “comps”.

The characteristics that are most often used are the size, age, number of bedrooms and bathrooms, general property conditions, property type and proximity to the subject property. Typically, a realtor will go back no more than 6 months to get the best comparable sales (“comps”).

However, that is not always possible and the realtor will go further back and/or extend the search area out further out to grab more comparable properties. Once the best comps have been selected, adjustments are made to each comp for the differences between the comp and the subject property.

Note: a realtor is not an appraiser. So the adjustments being made are just estimates. Once the adjustments have been made, a value range is determined. Realtors will provide the CMA in a report form to share with their clients.

 

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