What is a comparative market analysis (CMA)?

A comparative market analysis (CMA) is a tool utilized by real estate agents to estimate a property’s value by comparing it to similar properties that have recently sold in the same area. This process involves analyzing various factors such as location, size, condition, and features of properties that are considered comparable. The goal is to provide a strategic pricing recommendation for sellers and a basis for making informed offers for buyers.

The CMA takes into account recent sales data, current listings, and market trends that can affect property values, helping agents to effectively advise their clients on pricing strategies tailored to the specific property and market conditions. By focusing on similar properties, the CMA ensures that the estimated value reflects current market dynamics, making it a fundamental part of the real estate transaction process.

Other options describe different aspects of real estate but do not specifically align with the purpose and function of a CMA. For example, investment planning tools or studies on broader market trends do not focus on the individual property valuation that a CMA provides. Similarly, a formal appraisal is a distinct process often required by lenders, involving a licensed appraiser, which is separate from the CMA's more informal analysis by real estate agents.