What is the purpose of a comparative market analysis (CMA)?

The purpose of a comparative market analysis (CMA) is to estimate a property's market value based on the sale prices of similar properties. This analysis involves comparing the subject property to recently sold properties that are similar in characteristics such as size, location, and features. By evaluating these comparable properties, appraisers or real estate agents can gain insights into the current market trends and pricing, which assists in determining a fair market value for the property in question.

A CMA is an essential tool in real estate, particularly for sellers to establish a competitive listing price or for buyers to understand the market value of properties they are interested in. It is not intended to set a final sale price, as pricing can evolve based on negotiation and market dynamics. Additionally, the CMA does not focus on evaluating the physical condition of a property or making decisions regarding rental agreements, which are unrelated objectives.