How to Prepare a Comparative Market Analysis (CMA):

🔹 1. Understand the Purpose

A CMA helps estimate a property’s market value by comparing it to recently sold, active, pending, or expired properties in the same area.

  • Sellers use it to set a competitive listing price.
  • Buyers use it to make informed offers.

🔹 2. Gather Property Information

Start with the subject property details:

  • Address & location
  • Square footage (living area)
  • Lot size
  • Number of bedrooms & bathrooms
  • Age of property & condition
  • Special features (pool, remodels, views, ADUs)

👉 Use public records, MLS data, or property profile reports to confirm accuracy.

🔹 3. Select Comparable Properties

Pick 3–5 comparable properties (comps) within 0.25–1 mile radius of the subject property.

  • Active listings: Shows current competition.
  • Pending sales: Shows what buyers are willing to pay right now.
  • Closed sales (last 3–6 months): Best indicator of market value.
  • Expired listings: Shows what price point the market rejected.

🔹 4. Adjust for Differences

Compare each comp to the subject property and adjust values:

  • Square footage (larger homes usually cost more per sq ft).
  • Lot size (bigger lots may add value).
  • Condition/upgrades (renovated kitchen vs. original).
  • Location factors (corner lot, busy street, cul-de-sac).
  • Amenities (garage vs. carport, pool vs. no pool).

👉 Example: If the comp sold for $700,000 but has a pool worth $20,000 more than the subject property, adjust its effective value down to $680,000 for comparison.

🔹 5. Analyze Market Trends

Look at:

  • Average days on market (DOM).
  • List-to-sale price ratio (are homes selling above or below asking?).
  • Inventory levels (seller’s vs. buyer’s market).

👉 This helps explain pricing strategy, not just raw numbers.

🔹 6. Establish a Price Range

After adjustments, you’ll have a low-to-high value range.

  • For sellers: Recommend a strategic list price (often slightly below high value to attract offers).
  • For buyers: Suggest a fair offer price based on comps and negotiation leverage.

🔹 7. Present the CMA Professionally

Use a clear format:

  • Cover page (property address, agent info, date).
  • Subject property details.
  • Comp sheets with photos and data.
  • Adjustments summary table.
  • Market trends overview.
  • Recommended price range.

👉 Tools: MLS, Cloud CMA, RPR, or brokerage CMA software.

✅ Key Takeaway

A CMA is not an appraisal, but it’s a data-driven estimate to guide pricing and offers. Accuracy, transparency, and professional presentation build trust with clients.

Disclaimer:
The questions and answers provided are for general guidance only and may not cover all details or apply to every situation. If anything is unclear or you need further clarification, please visit car.org for official resources and the most up-to-date information from the California Association of REALTORS®.