What is a CMA (Comparative Market Analysis)?

A Comparative Market Analysis (CMA) is an estimate of a property's value prepared by a licensed real estate agent or broker based on recent sales of similar properties (comparables or "comps") in the same area. A CMA is used primarily to help sellers set a listing price and help buyers determine an appropriate offer price. While similar in concept to a formal appraisal, a CMA differs in several important ways: it is prepared by an agent (not a licensed appraiser), it is not subject to USPAP standards, it is typically provided for free as part of the agent's services, and it cannot be used for lending purposes.

A thorough CMA analyzes three categories of comparable properties: recently sold properties (most important, typically within the past 3-6 months), currently active listings (competition), and expired/withdrawn listings (properties that did not sell, indicating potential overpricing). When selecting comparables, agents look for properties that are similar in location, size, age, condition, features, and property type. Adjustments are made for differences between the comparables and the subject property — adding value for features the comparable lacks and subtracting for features the subject lacks.

The final CMA typically presents a recommended price range rather than a single number. The key acronym to remember is "CBS" — Comparable Better, Subtract (or alternatively, "CIA" — Comparable Inferior, Add). A BPO (Broker Price Opinion) is a similar analysis used by lenders for certain purposes.