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Comparative Market Analysis (CMA)

Also called CMA, comps, market analysis

In short

A comparative market analysis (CMA) is a real estate agent's estimate of a home's value based on recent sales, pending sales and active listings of similar nearby properties.

Prepared by
A real estate agent
Cost
Usually free
Used for
Listing price or offer price
Typical comps
3 to 6 similar homes

How a CMA is built

The agent finds recently sold homes close by, ideally within the last three to six months, with similar size, age, bedrooms, bathrooms and lot. They adjust each comp's price for differences, such as an extra bathroom or a remodeled kitchen, then use the adjusted range to suggest a value. Pending and active listings show where the market is heading.

Using a CMA on distressed properties

Comps for a distressed home need care. Foreclosure and short-sale prices can drag a neighborhood's averages down, and a home needing major work shouldn't be compared directly with renovated ones. Investors run two CMAs: one for current as-is value and one for after repair value.

Limits of a CMA

A CMA is an opinion, not a formal valuation. Lenders rely on an appraisal instead. Quality depends on the agent's local knowledge and how comparable the comps really are.

Example

Pricing an offer from comps

A buyer's agent pulls four sold 3-bedroom homes within half a mile from the last four months: $262,000, $270,000, $275,000 and $281,000. After adjusting for the subject home's smaller garage (-$5,000) and newer roof (+$6,000), the adjusted range is about $263,000 to $282,000. The buyer offers $268,000 on a home listed at $285,000.

Comparative Market Analysis (CMA) vs. Appraisal

Comparative Market Analysis (CMA)

A comparative market analysis (CMA) is a real estate agent's estimate of a home's value based on recent sales, pending sales and active listings of similar nearby properties.

Appraisal

An appraisal is a licensed appraiser's independent estimate of a property's market value. Lenders require one to make sure the home is worth at least the amount being borrowed.

The differenceA CMA is an agent's informal estimate, usually free; an appraisal is a formal, regulated valuation by a licensed appraiser that lenders require.

Frequently Asked Questions

Related terms

After Repair Value (ARV)InvestingAfter repair value (ARV) is the estimated market value of a property once planned repairs and renovations are complete. Investors use it to decide how much to pay for a fixer-upper.The 70% RuleInvestingThe 70% rule is a fix-and-flip guideline: pay no more than 70% of a property's after repair value (ARV) minus the cost of repairs. It leaves room for profit, holding and selling costs.Short SaleForeclosure processA short sale is the sale of a home for less than the amount owed on its mortgage, with the lender's approval. The lender agrees to accept the reduced proceeds to avoid a foreclosure.REO / Bank-Owned PropertyForeclosure processAn REO (real estate owned) or bank-owned property is a home a lender took back after it failed to sell at foreclosure auction. The lender then sells it, usually through a real estate agent.Resale (After Foreclosure)InvestingA resale is the last stage of the foreclosure lifecycle: a buyer or investor who bought the property at auction or from the bank repairs it, then lives in it, rents it out or sells it again on the open market.Home InspectionBuying & closingA home inspection is a professional visual examination of a home's structure and systems, ordered by the buyer to find defects before closing. It usually happens during the inspection contingency period.Opening BidForeclosure processAn opening bid is the first bid at a foreclosure auction, usually placed by the lender. Other bidders must exceed it to buy the property; otherwise the lender takes it back.Real Estate WholesalingInvestingReal estate wholesaling is putting a property under contract at a discount and then assigning that contract, or reselling the property, to another investor for a fee, without renovating it.

Learn more in the knowledge base

How to Make an Offer on a House and NegotiateGuide · 8 min readAn offer is more than a price. The deposit, contingencies, timeline and requests you include all shape whether the seller says yes and how protected you are afterwards. This guide explains each term and how negotiation usually unfolds.Researching a Foreclosure Property Before the AuctionGuide · 6 min readAt a foreclosure auction you usually buy as-is, unseen and without contingencies, so research done before the sale is your only protection. This guide covers how to confirm the sale details, check title and liens, estimate value and repairs from the outside and turn it all into a maximum bid.How to Evaluate a Pre-Foreclosure DealGuide · 6 min readOnce an owner is interested in selling, you can replace rough screening estimates with real numbers. This guide walks through confirming what is owed, finding every lien, assessing condition and repairs, estimating value, and turning those figures into a maximum price you will not go above.
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Disclaimer: The information on this page is for general educational purposes only and is not legal, financial, tax or investment advice. Laws, lending rules and market conditions vary by state and change over time, and any figures shown are estimates. Before you buy, sell, finance or bid on a property, consult a qualified attorney, financial advisor, lender or licensed real estate professional about your situation.