Comparative Market Analysis
An informal property valuation method used by real estate agents comparing a home to recently sold similar properties to estimate its market value.
What is Comparative Market Analysis?
A comparative market analysis (CMA) is a real estate agent's assessment of a property's likely market value based on recent sales of comparable properties—known as 'comps'—in the same neighborhood or market area. Unlike a formal appraisal conducted by a licensed appraiser, a CMA is performed by a licensed real estate agent or broker and is not accepted by mortgage lenders as a formal valuation. Agents select comps by matching similar square footage, bedroom/bathroom count, age, condition, lot size, and location, then adjust for differences (pool, garage, finishes) to derive an indicated value range. CMAs are most commonly used to help sellers set an asking price or to guide buyers formulating a purchase offer. The output is a price range, not a single figure, reflecting market uncertainty. Active listings, pending sales, and expired listings also inform the CMA by showing competition and demand.
Example
A seller's agent preparing a CMA for a 2,000-square-foot, three-bedroom home in a suburban Phoenix neighborhood finds three recent comps: a 2,050-sf home sold for $415,000, a 1,950-sf home sold for $398,000, and a 2,100-sf home sold for $422,000. Adjusting for differences in condition and lot size, the agent derives a value range of $405,000–$418,000 and recommends listing at $412,000. The CMA gives the seller data-driven pricing confidence without the cost of a formal appraisal.