what's a comparative market analysis?

A Comparative Market Analysis is a report prepared by a real estate professional that estimates a home’s value based on the sale prices of similar properties (called comparables or “comps”) in the same area. It’s not an official appraisal, but it’s a vital tool for pricing a home to sell or making a competitive offer as a buyer.

A CMA is completed by a real estate agent to help determine a realistic listing or offer price. An appraisal, on the other hand, is performed by a licensed appraiser and is typically required by lenders to confirm a property’s value before approving a mortgage. A CMA is free and used for guidance; an appraisal is a formal valuation.

A CMA helps you price your home competitively in the current market. Overpricing can lead to a longer time on the market and eventual price reductions. Underpricing can result in leaving money on the table. A CMA gives you the data needed to make informed pricing decisions and attract serious buyers.

If a homeowner believes their property tax assessment is too high, they may use a CMA to show that similar homes in their area have sold for less. This can support an appeal with the local tax assessor’s office.