A Comparative Market Analysis (CMA) is best described as which of the following?
Correct Answer
A) An analysis prepared by a real estate licensee to help price a property using comparable sales
A CMA is prepared by a real estate licensee (not a licensed appraiser) to help sellers price their property or help buyers evaluate an offer. It uses recent comparable sales, active listings, and expired listings to estimate market value. A CMA is not a formal appraisal and cannot be used for mortgage lending purposes.
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Reconciliation is the final step in the appraisal process where the appraiser analyzes the value indications from all applicable approaches and arrives at a single final opinion of value. It is not a simple average of the three values.
The comparable sales approach estimates a property's value by comparing it to similar properties that have recently sold in the same market area. It is the most widely used and reliable approach for appraising residential properties.
The cost approach estimates a property's value by calculating the current cost to rebuild the improvements, subtracting accumulated depreciation, and adding the land value. It is most reliable for new construction and special-purpose properties.
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