What is a CMA in Real Estate? A Complete Breakdown

Published February 17, 2023

Written by Steve Nicastro
Edited by Jamie Ayers

What is a CMA? | What’s included in the report? | How to create one | How to get a free CMA

A comparative or competitive market analysis (CMA) in real estate is a professional home value estimate based on the recent sales of similar properties in the area.

A CMA is one of the most valuable tools provided by a real estate professional in the buying or selling process. The report helps sellers determine a home’s fair market value to set a listing price, and home buyers to determine a competitive offer price on a home.

Our guide breaks down what you need to know about CMAs. We discuss what’s in a CMA report, how to create one on your own, and how to get a free CMA from a local realtor.

Understanding a CMA in Real Estate

🔑 Key Takeaways

A CMA in real estate is a useful home valuation method for home sellers and buyers.
Realtors often provide a free CMA report to help home sellers set a fair listing price.
You can complete your own CMA with online home value data, but the numbers won’t be as accurate compared to a realtor-provided report.
We recommend contacting a local real estate pro for the most accurate home value estimate.

A CMA report in real estate provides an accurate estimate of a home’s fair market value relative to other properties in the area.

An experienced real estate agent typically chooses three or more recent “comparable” home sales (home most similar to the subject property) to create a CMA.

The agent pulls sales data from the multiple listing service (MLS), which is a system used by most agents and brokers. The MLS has accurate and up-to-date sales information.

The sales price of each property adjusts for differences in square footage, bedrooms and bathrooms, key features, condition, lot size, and age.

Finally, the agent arrives at a fair market value based on comparable sales data and value adjustments.

What’s included in a CMA report?

A well-prepared CMA report from an agent should provide the following sales information:

What homes like the subject property have sold for recently.
How long it took each home to sell after listing.
Each home’s final sale price compared to its initial listing price.
Low, average, median, and high sold prices.

The report includes a complete breakdown of recent, relevant home sales in your area. Here’s the information it usually includes.

Subject property data

A CMA report contains a description of the property being valued. That usually includes its address, bedrooms, bathrooms, square footage, lot size, acreage, and year built.

Location of each sale

You’ll also find the address of each comparable home sale, and its distance from the subject property (in miles).

Ideally, comparable sales should be located within the same neighborhood, subdivision, or town, and no further than 1-2 miles away.

Status and date of sales

The current status of each home (active, pending, or closed), and the date of each home sale.

Real estate agents rarely use active listings as comps, and usually only choose homes that have sold within the past three months.

Square footage

The approximate interior square footage of the subject property and each comparable sale, with value adjustments based on its size.

Age and property condition

The age of the home and a brief description of the current condition of each property (poor, average, or good).

Lot size

The approximate acreage or lot size of each property, based on its tax records.

Upgrades, amenities, or special features

The CMA report may also provide a breakdown of any value-adding improvements made to each property, like interior and exterior renovations (kitchen upgrades, inground pool, etc).

How to create your own CMA report

Looking to complete a comparative market analysis? You can get a rough estimate of a home’s value without the help of an agent, using a popular real estate website like Zillow.

For the most accurate CMA report, contact a local real estate professional. Agents can access the most up-to-date sales data in the current market, and have experience valuing homes.

» MORE: Learn how to find a realtor

CMA example

We chose a random home in the town of Summerville, SC, with an estimated fair value of $475,000, according to Zillow. Here are the details:

Category	Details
Bedrooms	4
Bathrooms	3
Square footage	2,591

1. Find recent home sales

My goal is to choose the three most similar and recent home sales. On Zillow, filter sold homes by price, beds and baths, and square feet.

I’ve chosen a sold price range between $450,000 to $550,000, including homes with at least four bedrooms and three bathrooms, and a minimum of 2,000 square feet.

I only chose homes that sold within the past 90 days, within a radius of 1 mile of the subject property.

2. Choose the most relevant sales

The filtered search returns seven results, so I have some work to get it down to three.

I’m looking for homes within 200 to 300 square feet or so of the subject property. And I’ve searched through photos of each property to see which one is most similar in condition and features.

Here are the three comparable properties I chose compared to the subject property.

Category	Subject	Comp 1	Comp 2	Comp 3
Sale price	N/A	$503,000	$515,000	$510,000
Beds	4	4	4	4
Baths	3	3	3	3
Sq. ft.	2,591	2,665	2,802	2,515

I chose these three sales because the homes all have the same number of beds and baths, are the closest in square footage, and are similar in condition.

3. Calculate an estimated fair value

Now I need to add up the sale prices and divide them by three to determine the subject property’s estimated value.

In this example, the subject property has an estimated fair market value or adjusted price of $509,333.

Measuring value by square feet

You can see in the above table that two of the three comps are larger than the subject property. To get a more accurate home value estimate, we can calculate the value based on price per square foot.

We need to divide each comp’s sale price by its square footage.

Property	Sale price	Square feet	Price per sq. ft.
Comp 1	$503,000	2,665	$189
Comp 2	$515,000	2,802	$184
Comp 3	$510,000	2,515	$203
Average	$509,333	2,661	$192

The average price per square foot for the three comps is $192.

Multiply that figure by the subject property’s square footage (2,591), and we get an estimated current market value of $497,472.

Based on these results, Zillow’s “Zestimate” for the home ($475,000) undervalues the home by more than $22,000! That’s why is so important to have a real estate pro provide you with a CMA vs. relying on home value estimates.

» MORE: Get a free, no-obligation CMA from a local realtor

Alternatives to a CMA report

zillow-home-value-estimate-cma-real-estate

CMAs vs. home value estimators

CMAs are far more accurate and detailed than online home value estimators. Here’s why:

A real estate pro hand selects comparable sales and makes adjustments, based on the home’s size, condition, and upgrades.
A home value site simply pulls recent home sales data based on an algorithm. It often chooses outdated or irrelevant comps and fails to give homes credit for their upgrades.

Home value estimators are useful for a quick ballpark estimate of your home’s value, but shouldn’t be used in place of a CMA report to set a listing price on your home.

CMAs vs. pre-listing appraisal

A licensed appraiser creates a pre-listing appraisal, while a realtor or broker creates a CMA report. You can get an appraisal before listing your home if you desire a more detailed home valuation from a licensed pro.

However, appraisals are expensive ($400 – $500) and can take weeks to complete, so keep this in mind before proceeding.

CMAs vs. broker price opinion (BPO)

A BPO is similar to a CMA in that it’s also a home valuation report created by a real estate professional. Sellers use BPO’s to determine a fair listing price, and homeowners may use them to remove private mortgage insurance (PMI) from an existing mortgage.

However, a BPO usually isn’t free (it costs between $150 to $250). It’s an option if you want to sell your home without an agent, and need to determine a fair listing price.

How to get a CMA from a real estate agent

Most realtors provide a free CMA during the initial listing interview with a home seller. It’s a way for the agent to show you that they know their stuff, to win your business.

However, the quality and accuracy of CMA reports vary by agent. For the best results, you need to meet with a realtor who’s experienced and knowledgeable about your local market.

We recommend finding a realtor through a free agent matching service, which recommends pre-vetted agents after first learning about your needs.

For example, Clever Real Estate provides multiple agent matches, so you can request several CMA reports and compare them to determine your home’s fair value.

Clever carefully vets agents who join their network, so you know you’re getting a home value estimate from a quality agent.

FAQs

What is a comparative market analysis report in real estate?

A CMA in real estate is an estimate of the fair market value of a property. The home valuation report is typically completed by a real estate professional (realtor or broker), by comparing recently sold properties, or comps, located closest to the subject property.

Learn more about CMAs and what's typically included in the report, and find a local realtor to get a CMA.

How do I get a free CMA report?

CMAs are usually offered for free by realtors and brokers during the initial listing interview. You simply need to find a local realtor and request a listing presentation or home valuation report to get a free CMA.

Do I need a licensed appraiser to complete a CMA?

No. In fact, a licensed appraiser will not be able to provide you with a CMA, Instead, they can provide you with a professional appraisal if you desire a more detailed home valuation from a licensed pro. Learn more about CMA alternatives.

Is a comparative market analysis the same thing as an appraisal?

No. A CMA is created by a licensed real estate agent or broker, and is usually offered for free. An appraisal is created by a licensed appraiser and often costs at least $400 - $500. Appraisals tend to be more detailed than CMAs; appraisers usually inspect the interior and exterior of the home before completing their valuation, while some agents just pull the numbers from the MLS.

Comparative Market Analysis: The Ultimate Guide to CMAs