What is a comparative market analysis (CMA)?

A comparative market analysis (CMA) is fundamentally an assessment of similar properties that allows real estate professionals to determine a property's market value based on recent sales data, active listings, and other relevant factors. This is achieved by analyzing properties that are comparable in nature to the subject property, including their size, location, age, condition, and features. The outcome of a CMA provides valuable insights to both sellers and buyers regarding appropriate pricing strategies in a competitive marketplace.

This method does not evaluate historical market trends broadly, nor does it solely focus on setting rental prices. While some elements of historical data might be considered, CMAs primarily emphasize current market conditions and comparable sales, which makes option A not entirely suitable. Additionally, although setting rent prices may incorporate some comparative analysis, it does not align specifically with the standard purpose of a CMA, which is geared more towards determining value for sale rather than rental pricing, making option B less appropriate. Lastly, a CMA is not a legal requirement; it is an informal tool used by real estate professionals to assess market value, distinguishing it from appraisals, which are governed by official standards and regulations. Thus, option D also does not accurately define a CMA.