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What does a 'comparative market analysis' (CMA) tell a seller?

Correct answer

An estimated market value range based on recent comparable sales, current active listings, and expired listings — not a licensed appraisal, but a professional opinion of value used to advise sellers on pricing strategy

  1. A The property's assessed tax value
  2. B An estimated market value range based on recent comparable sales, current active listings, and expired listings — not a licensed appraisal, but a professional opinion of value used to advise sellers on pricing strategy
  3. C The exact selling price the property will achieve
  4. D The property's replacement cost

Why this is the answer

COMPARATIVE MARKET ANALYSIS (CMA): A broker-prepared price analysis for buyer or seller clients. Methodology: SOLD COMPARABLES: Recently sold properties (similar size, condition, location, features, within 6-12 months) — these provide the strongest evidence of current market value; ACTIVE LISTINGS: Current competition for the seller (they cap the realistic sale price); EXPIRED LISTINGS: Properties that didn't sell (often overpriced) — helpful in calibrating what NOT to price at. CMA vs APPRAISAL: A CMA is NOT an appraisal (only licensed appraisers can provide formal appraisals for lending purposes); a CMA is a professional's informed opinion of market value; CMAs are free tools brokers use in listing presentations; appraisals cost $400-$800 and are required by lenders. AGENT LIABILITY: Stating an expected price as a guarantee rather than an estimate can create liability — frame CMAs as estimated ranges based on current market conditions.
Source: Real Estate State Exam, Comparative Market Analysis

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