Under California law, when a real estate licensee prepares a Comparative Market Analysis (CMA) for a property, what is the legal distinction between a CMA and a formal appraisal?
Correct Answer
A) A CMA is an opinion of value prepared by a licensee as part of a listing or buying service and is not a formal appraisal subject to USPAP standards
Under California Business & Professions Code §10131 and DRE regulations, a real estate licensee may prepare a CMA as part of listing or buying services. A CMA provides an estimated market value but is NOT a formal appraisal. Formal appraisals must comply with USPAP and can only be performed by state-certified or licensed appraisers under BREA oversight. A CMA is a market analysis tool, not an appraisal.
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Previous Question
A California appraiser applies paired sales analysis to measure the market impact of a Mello-Roos special tax. Home A, located within a Mello-Roos district with an annual special tax of $5,400 and 22 years remaining on the bond, sold for $1,180,000. Home B, an otherwise identical property outside the district, sold for $1,225,000. What does the paired sales analysis indicate as the market-derived value impact of the Mello-Roos burden?
Next Question
An agent preparing a CMA identifies a recent parent-to-child transfer of a single-family home. The agent cannot confirm whether the transfer involved a gift, a below-market sale, or a full market-value transaction. What is the most important factor in determining whether this property can be used as a valid comparable?