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

The purpose of a comparative market analysis (CMA) is to determine a property's market value by comparing it to similar properties that have recently sold in the same area. This process is essential for real estate professionals as it provides a basis for setting a competitive listing price or making informed offers on properties. The analysis takes into account various factors, such as the size, location, condition, and features of the properties involved, allowing for a more accurate estimate of value based on current market conditions.

A CMA is not meant for appraising a property for tax purposes, as that involves different methodologies and assessments. Although it may provide insights into market trends, the primary function of a CMA is not to analyze market trends over an extended period but rather to provide a snapshot of comparable sales at a given time. Additionally, while CMAs might inform property management strategies, this is not their main intent; instead, they are primarily focused on pricing for buying and selling transactions.