Sales Comparison & CMA
~12 min read · Adjust comparables toward the subject and build a defensible CMA.
The sales comparison approach — and its everyday cousin the CMA — turns recent sales into a value opinion through one disciplined move: adjust the COMPARABLE toward the subject. Master the direction rule (CBS: comp better, subtract) and the grid takes care of itself.
Selecting comparables
Choose recently sold properties (the fresher the better; markets move) that are competitive with the subject: same market area, similar size, style, age, and appeal — sales a buyer would genuinely consider instead. Verify each sale was arm's length (no family deals, foreclosures priced under duress, or concession-inflated prices without adjustment). Three solid comps is the working standard; data quality beats data quantity.
- Recent, nearby, genuinely competitive sales
- Arm's-length verification before use
- Adjust or discard concession-distorted prices
The adjustment discipline
All adjustments are made to the comparable's sale price, never to the subject: if the comp is BETTER than the subject, SUBTRACT; if the comp is WORSE, ADD (CBS — Comp Better Subtract; CPA — Comp Poorer Add). Adjust in the standard sequence — financing/concessions and conditions of sale first, market conditions (time) next, then location and physical characteristics. Each adjustment is the feature's contributory value (paired-sales evidence), not its cost. The subject never has a price to adjust — that is the point of the exercise.
- Adjust the comp toward the subject — always
- Comp better → subtract; comp worse → add
- Sequence: concessions → time → location → physical
- Amounts come from contribution, not cost
Reconciling and the agent's CMA
The adjusted comp prices form a range; reconciliation weights the most similar, least-adjusted comps most heavily — never a mechanical average. An agent's CMA applies the same logic less formally, adding actives (the competition, a ceiling), pendings, and expireds (the overpricing graveyard) to advise a list price. A CMA is not an appraisal, and agents must say so where state law requires.
Worked example
Subject: 3-bed, 2-bath, no garage, average condition. Comp A sold for $410,000: 3/2 WITH a 2-car garage (contributory value $18,000), otherwise identical. Comp B sold for $385,000: 3/2, no garage, but 8 months ago in a market that has risen 5% since. Comp C sold for $402,000: identical but a renovated kitchen worth $12,000 over the subject's. Run the grid.
Comp A: has a garage the subject lacks — comp better, SUBTRACT $18,000 → $392,000. Comp B: older sale in a rising market — the comp's price is understated for today; time adjustment ADDS 5% ($19,250) → $404,250 (no other differences). Comp C: superior kitchen — comp better, SUBTRACT $12,000 → $390,000. Adjusted range: $390,000–$404,250. Reconcile: A and C required one clean adjustment each and sold recently — weight them; B carries the biggest (time) adjustment. A defensible opinion lands near $392,000–$395,000. The mechanical trap the exam sets: adding the garage value to the subject or subtracting the time adjustment — direction errors that invert the answer.
Common exam pitfalls
Adjusting the subject's 'price.'
The subject has no price — every adjustment modifies a comparable's sale price toward the subject.
Reversing adjustment direction.
CBS: Comp Better, Subtract. The comp's advantage inflated ITS price; remove the advantage.
Averaging the adjusted prices.
Reconciliation weights by similarity and adjustment size — judgment, not arithmetic means.
CBS/CPA: Comp Better Subtract, Comp Poorer Add — and the subject stays untouched.
Recap
- Recent, competitive, arm's-length comps — verified
- Adjust comps toward the subject, never vice versa
- Direction: comp better → subtract; comp worse → add
- Sequence: concessions, time, location, physical
- Amounts = contributory value from paired sales
- Reconcile by weighting best comps; CMA = informal cousin, not an appraisal
Prove it: 10 questions on this topic
Every lesson ends with a ten-question check in the free course — your progress syncs between the web and the EstatePass app.