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

A comparative market analysis, or CMA, is primarily used to determine the fair market value of a property. This process involves evaluating a property's value by comparing it to similar properties that have sold in the same area, taking into account various factors such as the size, condition, features, and location of each property. By analyzing the sale prices of comparable properties, real estate professionals can provide clients with a well-informed estimate of what a property is worth in the current market.

The importance of a CMA lies in its capacity to guide sellers in pricing their homes competitively or to help buyers understand what they should expect to pay for similar properties. It is an essential tool for setting realistic expectations in real estate transactions.

While evaluating rental income, assessing investment risk, or outlining legal title play important roles in the real estate landscape, they are not the core objectives of a CMA. A CMA focuses specifically on establishing an accurate market value based on recent sales data, which is crucial for effective buying and selling strategies.