Comparative market analysis (CMA)

A comparative market analysis is a real estate agent's report estimating a property's market value based on recent sales of comparable properties in the immediate area. CMAs are the starting point for both seller pricing decisions and buyer offer strategy. They're produced by listing agents (for pricing analysis) and buyer's agents (for offer analysis), pulling data from the local MLS.

How it works: the agent identifies several recent sales (typically 3 to 6) of properties similar to the subject in size, age, condition, location, and amenities. For each comp, the agent makes adjustments, adding or subtracting dollar amounts to reflect differences from the subject property. A comp with one fewer bedroom gets adjusted up; a comp with a finished basement that the subject lacks gets adjusted down. The reconciled value range is the agent's estimate of what the subject would sell for in current market conditions.

Why it matters: the CMA is the data foundation for the listing-price decision and for how much a buyer should offer. It's not the same as an appraisal (the CMA is an agent's market opinion, not a licensed appraiser's report) but it's typically what guides the contract price, which is what the appraisal then evaluates against.

Common gotcha: weak CMAs reach for properties from too far away, too long ago, or in materially different condition. A subject home with no garage being compared to a comp with a two-car garage and no adjustment is overstating the subject's value. Reading the CMA carefully (looking at each comp specifically, not just the headline range) is what separates a useful market read from a defensible-looking but flawed analysis.