What is the purpose of a comparative market analysis (CMA)?

A comparative market analysis (CMA) serves the primary purpose of estimating a property's value by analyzing similar property sales within a specific area and timeframe. This process involves evaluating recent sales of comparable properties, often referred to as "comps,” to assess market trends and set a fair market value for the property in question.

By utilizing data from comparable properties, a CMA provides a data-driven approach to price estimation. This analysis typically includes factors such as location, size, condition, and features of the properties being compared, allowing sellers, buyers, and real estate agents to make well-informed decisions regarding pricing strategies. This is crucial for setting realistic prices that align with current market conditions, helping sellers avoid overpricing or underpricing their properties.

The focus on property valuation makes it distinct from other functions, such as determining buyer qualifications or identifying potential property defects, neither of which directly relates to market value estimation.