Definition
A Comparative Market Analysis (CMA) is a detailed report prepared by a real estate agent that estimates a property’s market value based on recently sold, similar properties in the same area. A CMA helps sellers set a competitive listing price and helps buyers determine a fair offer when purchasing a home.
Explanation
A CMA is different from an appraisal, as it is conducted by a real estate agent rather than a licensed appraiser. However, it serves a similar purpose: to analyze recent home sales (comps), active listings, expired listings, and other market conditions to determine what a home is worth.
A well-prepared CMA considers:
- Recent Sales (“Comps”) – Similar homes that have sold in the last 3-6 months.
- Active Listings – Homes currently for sale that compete with the subject property.
- Pending Sales – Homes under contract, giving insight into current market conditions.
- Expired & Withdrawn Listings – Properties that failed to sell, often due to overpricing.
A real estate agent will adjust the home’s value based on differences in size, condition, upgrades, and location to provide a realistic price range for the property.
Example
A homeowner is preparing to sell their 3-bedroom, 2-bathroom home and wants to price it competitively. Their real estate agent performs a CMA and finds that similar homes in the neighborhood sold for between $450,000 and $480,000 in the past three months. The agent suggests listing the home at $465,000 to attract buyers while remaining competitive.