What is a Comparative Market Analysis (CMA)?

A Comparative Market Analysis (CMA) is fundamentally a method used to evaluate properties in order to establish a value that reflects current market conditions. This approach involves analyzing similar properties, often referred to as "comparables," which have recently sold in the area, are currently on the market, or were previously listed but did not sell. By comparing the features, conditions, and locations of these properties, real estate professionals can arrive at a well-informed estimate of a property's market value.

This process helps sellers set realistic listing prices and assists buyers in making competitive offers, thus serving as a vital tool in real estate transactions. The focus on similar properties ensures that the analysis takes into account variations in property attributes and local market dynamics, aligning the assessment closely with what buyers are willing to pay.

The other options, while related to property assessment, do not capture the essence of a CMA. An assessment of a property's physical condition concerns the structural and aesthetic aspects of the property itself rather than its market value. A valuation method for rental properties typically involves different metrics like income generation potential, and a report on property insurance rates centers on insurance considerations rather than market evaluations. Therefore, the emphasis of a CMA is specifically on assessing comparable properties to determine and support market value.