What is a comparative market analysis (CMA)?

A comparative market analysis (CMA) is a tool used to evaluate a property's value by analyzing comparable properties that have recently sold in the same area or neighborhood. This analysis involves comparing various characteristics of the properties, such as size, location, condition, and amenities, to derive a fair market value for the property in question. It is an essential resource for real estate agents, buyers, and sellers as it provides insight into the current market trends and pricing strategies.

The task of comparing similar properties helps in understanding how much a property might fetch in the market, guiding sellers in setting an appropriate listing price or assisting buyers in making informed offers. The comparables are carefully selected to ensure they are as similar as possible in order to obtain the most accurate assessment of value.

Other options do not pertain to the purpose of a CMA. Estimating mortgage rates is a separate process involving financial considerations rather than property valuation. Property tax measures are determined by local laws and assessments, not through a comparative process of similar properties. Lastly, a legal document in real estate typically refers to contracts or agreements, which is distinctly different from evaluating market value.