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 set a fair listing price, and home buyers to determine a competitive offer price on a home.
🔑 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.
Understanding a CMA in Real Estate
The purpose of a CMA report in real estate is to provide an accurate estimate of a home’s fair market value relative to other properties in the area.
To create a CMA, an experienced real estate agent typically chooses three or more recent “comparable” home sales (home most similar to the subject property).
The agent pulls sales data from the multiple listing service (MLS), a system used by most agents and brokers. The MLS has accurate and up-to-date sales information.
The sales price of each property is adjusted 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 the 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 their 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 description of the property being valued in the CMA report. That usually includes its address, bedrooms, bathrooms, square footage, lot size, acreage, and year built.
Location of each sale
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.
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 year each house was built, and a brief description of the current condition of each property (poor, average, or good).
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 your own 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.
However, for the most accurate CMA report, we highly recommend contacting a local real estate professional. Agents can access to the most up-to-date sales data in the current market, and have experience valuing homes.
» MORE: Learn how to find a realtor
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:
1. Find recent home sales
My goal is to choose three recent home sales that are the most similar to the subject property. 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
My filtered search returned seven results, so I have some work to do to get it down to three.
I’m looking for homes that are within 200 to 300 square feet or so of the subject property. And I’ve looked through the photos of each property to see which one looks the most similar in condition and features.
Here are the three comparable properties I choose compared to the subject property.
|Category||Subject||Comp 1||Comp 2||Comp 3|
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 come up with the subject property’s estimate 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 value based on price per square foot.
To do so, we’ll need to divide each comps sale price by its square footage.
|Property||Sale price||Square feet||Price per sq. ft.|
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.
Alternatives to a CMA report
CMAs vs. home value estimators
CMAs tend to be 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 its upgrades.
We don’t recommend using a home value estimator to value your home. They’re simply not accurate or reliable enough.
CMAs vs. pre-listing appraisal
A pre-listing home appraisal is created by a licensed appraiser, while a CMA is often created by a real estate agent. 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 takes 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. It’s often used by sellers to determine a fair listing price, and homeowners looking 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’re looking 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, in an effort to win your business.
However, the quality and accuracy of CMA reports varies 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.
CMA in real estate 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.
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.
How to Find a Realtor in 2022. Learn how to find the best real estate agent to help you determine your home’s fair market value through a CMA report, and get expert home sale tips.
Seller’s Net Sheet Guide. Learn how much money you may walk away with in your home sale with a seller’s net sheet. We provide a free net sheet template and calculator to help you estimate your potential sale proceeds.
The Best Home Value Websites of 2022. Free home value websites like Zillow can give you a ballpark idea of your home’s fair value. We rank the most popular home value estimators.
Redfin vs. Zillow: Which Estimator is More Accurate? We compare two of the most popular free home value estimators, explain how they work, and discuss which one is the most accurate.