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

The purpose of a comparative market analysis (CMA) is to estimate a property’s value based on similar recent sales. This process involves analyzing properties that are comparable to the one in question, which typically includes assessing their square footage, location, features, and recent sale prices. By examining these comparable properties, real estate professionals aim to determine a fair market value for the subject property, providing sellers with a competitive listing price or assisting buyers in making informed offers.

The effectiveness of a CMA lies in its focus on recent sales data, as this information reflects current market conditions and buyer behavior. Real estate trends can shift over time, and a CMA allows agents to pinpoint a value that aligns with the most relevant data, enhancing the chances of a successful transaction based on accurate, up-to-date information. The precision offered by CMAs makes them a crucial tool within the real estate valuation process, as they directly reflect the market's dynamics.

Other options involve methodologies or objectives that do not align with the specific function of a CMA. While historical value trends might inform market conditions, they do not provide immediate valuation insights for a specific property. Zoning restrictions pertain to land use regulations, unrelated to property value estimation. Finally, assessing future development potential involves a different type of