Finance
What is comparative market analysis (cma)?
Also called: Comparative market analysis
A comparative market analysis is an agent's estimate of a property's likely selling price, built by comparing it against similar nearby properties that have recently sold, are currently listed, or failed to sell.
A CMA rests on comparables — 'comps' — chosen for similarity in location, size, condition, age and type, then adjusted for the differences that remain. A comp with an extra bathroom or a larger plot is adjusted downward to make it comparable to the subject property.
Three categories matter, not one. Sold comps establish what buyers actually paid. Active listings show current competition. Expired and withdrawn listings show what the market refused, which is often the most informative of the three, because it marks the ceiling.
A CMA is not an appraisal. An appraisal is performed by a licensed appraiser, usually for a lender, and carries professional and legal weight a CMA does not. Presenting one as the other is a meaningful error.
Related terms
An appraisal is a formal opinion of a property's market value produced by a licensed appraiser, most often commissioned by a lender to confirm that a property is worth enough to secure the loan against it.
Absorption rate measures how quickly available properties are selling in a market, usually expressed as the number of months it would take to sell all current inventory at the recent pace of sales.
Days on market counts how long a listing has been actively for sale since it was published. It is used both as a market-health indicator and, by buyers, as a signal of negotiating room.
A listing presentation is the meeting where an agent pitches to represent a seller, covering proposed pricing, marketing plan, process and fee, in competition with other agents doing the same.