A comparative market analysis (CMA) in real estate is a tool that provides homeowners and potential buyers with insights into the fair market value of a property. By analyzing the prices of similar, recently sold properties in the same area, a CMA helps sellers set a competitive listing price and assists buyers in making informed offer decisions.
Utilizing a well-prepared CMA can significantly improve the chances of a successful transaction. It ensures that the property is priced strategically—not too high to deter potential buyers, nor too low to undercut the seller's potential return. While it's possible to conduct a preliminary CMA using online resources like Zillow, enlisting a realtor all but guarantees accuracy and access to comprehensive, up-to-date market data.
Here’s everything you need to understand about CMAs in real estate, complete with a real-world example and advice on obtaining a free analysis from a trustworthy realtor. Interested in determining the fair market value of your home? Take this quick quiz to connect with top-rated local agents ready to offer you a complimentary CMA.
🛡️ Why you should trust us
Daniel Bortz is a real estate agent in Northern Virginia, where he’s been selling homes for almost a decade. As an agent, he’s written more than his fair share of CMAs. He’s also covered the housing market as a reporter for The New York Times, The Washington Post, Money Magazine, Consumer Reports, Realtor.com, and other publications.
To research CMAs for this piece, Bortz spoke to four real estate agents from around the country: Matt Parker, a real estate agent at Keller Williams in Seattle, WA; Chris Dossman, a real estate broker at Century 21 Scheetz in Indianapolis, IN; Amelia Robinette, a principal broker at NoVa House and Home in Falls Church, VA.; and Richard Prigal, a Compass real estate agent based in Gaithersburg, MD.
In addition, this article was edited and reviewed by Steve Nicastro, managing editor at Clever Real Estate and a former real estate agent, during which time he completed dozens of CMAs for prospective home sellers and clients. Steve is also an active real estate investor, and have completed CMAs to analyze flips and rental properties.
What is a CMA in real estate?
In a rapidly fluctuating market, it’s more important than ever to get a CMA report from your real estate agent before listing your current home or making an offer on a new home.
For sellers, the market dynamics have shifted, increasingly favoring buyers. Current data shows homes remain on the market for a median of 73 days, a significant increase from the roughly 30-day average during 2022.[1]
Accurately pricing your home, perhaps even slightly below the fair market value, can spur greater buyer interest and help you secure an offer more swiftly. But you need to know what your home is actually worth to do that.
Additionally, correct pricing at the outset helps you avoid potential appraisal issues that could force price renegotiations later. For instance, if a CMA values your home at $500,000 but you list it at $550,000 and it appraises much lower than that, a lower appraisal could complicate the sale. According to the National Association of Realtors, 5% of all real estate contracts get delayed due to appraisal issues.[2]
A CMA is equally essential for buyers. Without this expert analysis, it's challenging to gauge a property's true market value. Relying solely on online home value estimators, such as those from Zillow or Realtor.com, can be risky as these tools are often inaccurate. A robust CMA helps prevent overpaying for a property or risking a low offer that sellers ignore.
How does a CMA in real estate work?
A CMA report assesses the value of your property by comparing it to similar homes (comps) that have sold recently—typically within the last three to six months—in your area. Here's how agents determine the most accurate comps and make adjustments to estimate your home’s fair market value:
- Age of the Home: Agents seek properties that are close in age to yours, usually within a few years, to ensure comparable depreciation and upkeep factors.
- Location: Proximity is key. Agents ideally look for comps within a one- to two-mile radius, prioritizing homes in the same neighborhood or subdivision for the most accurate comparison.
- Bedrooms and Bathrooms: A critical part of any comp analysis, agents match your home’s number of bedrooms and bathrooms with similar properties or adjust valuations based on differences.
- Square Footage: The size of the living space significantly influences valuation. Agents calculate the price per square foot of recently sold homes in your area to align with your home’s square footage.
- Type of Home: The structure type is considered to ensure like-for-like comparisons. For instance, a single-family home is compared with another one, and similar architectural styles are preferred to maintain consistency.
- Lot Size: Acreage plays a significant role in property valuation. Larger lots typically command higher prices, though adjustments are made based on the home's condition and age.
- Upgrades: Recent renovations, such as remodeled kitchens and baths, can significantly affect a home’s value. Amelia Robinette, a principal broker at NoVa House and Home in Falls Church, VA, notes the importance of an agent's ability to assess these upgrades, which online estimators like Zillow might not accurately reflect.
- Amenities: Features like swimming pools, gyms, and clubhouses, especially those within an HOA community, add value and are considered in the valuation.
In practice, finding an exact match among comps is rare. Agents usually identify homes with similar but not identical features and make necessary adjustments to the valuation.
For example, if your home and a recently sold neighbor's home both have four bedrooms and three bathrooms, but yours is 3,000 square feet compared to their 2,000, your home would likely be valued higher.
If the neighbor’s home sold for $150 per square foot, applying the same rate might suggest your larger home is worth around $450,000—a substantial $150,000 premium due to the additional space.
How accurate is a comparative market analysis?
A comparative market analysis is only as accurate as the most recent sales data. It’s a real challenge to value a home accurately if no homes in the area have sold recently. The real estate agent conducting the CMA also matters—some agents are more skilled at them than others. A local realtor will know the best comparables to choose and how to properly adjust home values.
"CMAs, or price opinions, fill in a blind spot for the seller,” says Matt Parker, a Seattle real estate agent at Keller Williams. “With a CMA from a broker, a seller gets a ‘real world estimate,’ or a price opinion based on reality. By reality, we mean the myriad things an algorithm can't generate, for example, privacy, cleanliness, lot layout, and interior design."
🤔 What about my home's Zestimate?
While online home value estimators like Zillow's Zestimate offer a quick glimpse into your property’s potential value, a CMA from a real estate agent generally provides a more accurate reflection of the market.
Zillow’s own history underscores the limitations of relying solely on algorithmic assessments: The company’s Zillow Offers venture, which attempted to flip homes based on such valuations, incurred losses of close to $1 billion, demonstrating significant misjudgments in property values.[3]
Nationally, Zillow's median error rate for homes currently on the market is around 3.2%, which means estimates can be off by up to $16,000 on a $500,000 home. The error rate rises to 7.52% for off-market homes, potentially misvaluing them by as much as $37,600.[4]
Other platforms like Realtor.com and Redfin also provide estimator tools, which, while useful, may not always deliver precise valuations. These online tools can be helpful as preliminary reference points if you're seeking a rough estimate of what your home might be worth. However, for those serious about selling, a professionally conducted CMA remains the most reliable method to determine the true market value of your home. Fill out this short quiz to get connected to a local realtor for a free CMA.
Comparative market analysis (CMA) limitations
CMAs are a great pricing tool for sellers and listing agents, but they have some notable flaws. “One issue with CMAs is that they're often created with 'lagging' data,” says Robinette.
This is where a savvy agent comes in handy, Robinette says. “Having an agent that's dialed into the local market, and has great relationships with other agents, allows them to find out information about under contract, pending, and active properties to gather other important data to include” in a CMA.
Many CMAs also miss recently withdrawn and expired listings, Robinette adds. “Those are important so one can understand what pricing and marketing strategies didn't work,” she says.
Comparative market analysis example
Richard Prigal, a Compass real estate agent based in Gaithersburg, MD, provided the following real-world example of a comparative market analysis. (Note: CMA reports may look different in other markets or states, but they all include the same basic information.)
* Images and addresses are blurred for privacy
Each row includes information about the comparable sales, including list price, sold price, list date, sold date, bedrooms, bathrooms, square footage, and other attributes. The “adj” column displays the adjustments that were made to each property.
Based on the CMA, Prigal says the subject property has an estimated market value of $1.2 million (highlighted in red).
CMA report vs. appraisal: What's the difference?
A CMA report is simply a tool used by real estate agents to estimate a home's market value, but it isn't the same as an official appraisal. Appraisals are detailed evaluations performed by certified professionals who specialize in determining the value of properties. Unlike realtors, who may see a home only from the outside before making an assessment, appraisers conduct thorough inspections of both the interior and exterior.
Moreover, appraisers are trained to provide an unbiased opinion of a property's value. In contrast, a realtor's estimate might be influenced by a desire to secure your business, potentially leading to an inflated valuation (that's why is important to choose a reputable agent for a CMA report).
Typically, the home buyer requests an appraisal after agreeing to purchase a property. This appraisal is part of the loan underwriting process initiated by the mortgage lender to assess the risk, as the property will act as collateral for the loan.
The cost of home appraisals can range from $400-600, depending on the market. Some sellers might consider getting a pre-listing appraisal to establish the fair market value of their home, although this isn't always necessary if they can rely on a well-conducted CMA by a skilled real estate agent. This approach may be particularly beneficial in cases where there are no comparable sales (comps), such as in rural areas or for unusually unique homes.
For FSBO (for sale by owner) sellers, the most common method for pricing their home is through an appraisal (40%), followed by examining recent homes sold in the area (36%), using online home evaluation tools (16%), and determining the profit needed from the sale (15%).[4]
Free real estate CMA report
Most real estate agents provide a free CMA as part of a listing presentation to prospective sellers as a way to win their listing. (Find out more about how real estate agents get paid.) It’s a good idea to meet with at least three real estate agents before choosing who will sell your home.
Before each agent visits your property, request that they provide a CMA. By comparing these analyses, you can better understand your home’s market value and discern whether an agent might be inflating the price to appeal to your preferences. This side-by-side comparison will clearly show which agents are potentially overestimating the value of your home and those who use a professional approach to deliver an accurate valuation.
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Match with Clever AgentsCMA vs. broker price opinion (BPO)
If you plan to sell your home by owner and don’t want to use an agent, we recommend asking a local real estate agent for a broker price opinion (BPO) rather than a CMA.
A BPO is a home valuation report prepared by a realtor or broker. But, unlike a CMA, you pay for it (typically $50-150). It's a lot cheaper than an appraisal (appraisals are $400–$600), and faster and easier to obtain. Plus, it can pay for itself by helping you sell your home faster and for a better price.
A BPO is more valuable than simply getting a home value estimate online from sites like Zillow and Redfin. The agent who performs your BPO can take into account the individual qualities that make your home more valuable, like upgrades or renovations.
How to do your own CMA
You can do your own CMA by researching comparable home sales on websites like Zillow or Realtor.com. Naturally, you may be biased. (We can’t blame you for thinking your home is the best house on the block!) But try to take a step back and evaluate your home the way a prospective buyer would. Take emotions out of the equation and find good comps by using the factors we outlined above.
- Start by gathering recent sales data in your area. Go to Zillow, for example, and enter your city in the search bar. Then filter results to show only “sold homes” and specify a time frame, like the past six months.
- Filter out homes that have sold. Set parameters that match your home’s characteristics: sale price range, number of bedrooms and bathrooms, home type (e.g., single-family, townhouse), and square footage within about 500 square feet of your home.
- Select comparable sales. From the filtered results, identify three homes that closely resemble yours regarding location, size, condition, and age. Review any available photos to assess interior and exterior upgrades, which can influence a home’s value.
- Calculate your home value. Take the sale prices of your selected comps. For example, if they sold for $400,000, $425,000, and $450,000, calculate the average to estimate your home’s value. You can also calculate the price per square foot for each comp. For instance, if a home sold for $400,000 and is 2,000 square feet, the price per square foot is $200. Use the average price per square foot and your home’s square footage to get another valuation perspective.
This DIY approach provides a useful estimate but remember, a professional CMA from a real estate agent can offer more precision due to access to the latest market data and valuation expertise.
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Find Your Agent with CleverFAQ
What is a CMA in real estate?
A CMA in real estate is a tool real estate agents use to estimate a home’s value based on comparable homes in the area that were recently sold. Many agents present a CMA when they audition for a listing to demonstrate to sellers that they know the local market inside and out.
What constitutes a comp?
An accurate comp (comparable) is a property that’s similar to your home with respect to its age, location, number of bedrooms and bathrooms, square footage, acreage, upgrades, and amenities. Real estate agents use comps to create a comparative market analysis (CMA) so you can decide how much to list your home for.
What does a CMA include?
A typical CMA includes anywhere from three to six comparable homes. The report includes a photo of each home, plus a list of key data, such as a property’s original list price, days on market, final sale price (if the property has been sold), its number of bedrooms and bathrooms, square footage, year built, and acreage. CMAs also include any adjustments made to the value of each property. For example, if the subject home has one more bedroom than a comp, and each bedroom is equal to $2,500 in value in the local market, the comparable home is $2,500 less in value.
