Key takeaways

  • A comparative market analysis or CMA is a useful tool to determine the fair market value of a property.
  • CMAs are created by comparing the home to other similar properties in the area and taking into account factors such as size, condition and special features.
  • While a CMA is not an official home appraisal, it can provide valuable insight to help sellers set an appropriate asking price — or help sellers know how much to offer.

Whether you’re in the market to sell your home or to purchase one, you’re going to need a feel for the value of the property. How else can you make sure that you’re asking for, or paying, a fair price? A comparative market analysis, often abbreviated to CMA, is a useful tool to achieve this and can give you a better sense of how much a given property is worth. Here’s everything you need to know.

What is a comparative market analysis?

A comparative market analysis is a compilation of data that can be used to estimate the value of a home. They are created by comparing the home in question to other similar homes in the area, in addition to many other factors. CMAs can provide both a general overview of the local market and a specific educated guess about the fair market value of a particular home, which can then be used to help set an asking price (if you’re the seller) or a bidding price (if you’re a prospective buyer).

A comparative market analysis examines homes in a given area that share many of the qualities of the home being analyzed. For example, it will look at properties that share comparable lot sizes, similar square footage and the same number of bedrooms and bathrooms. It will also take into consideration the age and condition of the property, improvements that have been made over the years, special features such as swimming pools and any other characteristics that might affect how much a buyer would be willing to pay.

“It’s critical to look at a CMA from the perspective of location, view, bedroom count, bath count, property age, parking, etcetera,” says Diana Sutherlin, a real estate agent with Compass in Jersey City, New Jersey.

A CMA will also take into account the conditions of the current housing market, both locally and nationally. This helps to determine what the likely selling price of a house might be given the conditions that it is being sold in.

Who typically creates it?

The analysis is usually put together by a real estate agent or broker — typically the seller’s agent, who prepares it to help determine how much a home’s asking price should be. Unlike a home appraisal, which is done by a professional appraiser, a CMA is typically a more informal look at the overall market. But just because it’s not an official appraisal does not mean it’s insignificant.

“Performing a quality market analysis is a real skill, and it’s important how experienced an agent is,” Sutherlin says. “The more familiar an agent is with appraisers, the more accurate an agent will be in pricing.”

You can perform your own CMA if you wish, whether you are hoping to sell without a Realtor or simply want to get a better idea of what the current local market looks like. Lots of data is readily available on realty listing sites that the general public can access. However, an agent knows their local market in ways a computer algorithm probably doesn’t.

“Online home value estimators can never replace human knowledge of a local market and home qualities,” says Sutherlin. “Even appraisers do not have the insight necessary for accurate home values if they don’t know the market intimately.”

Comparative market analysis example

Let’s create a hypothetical CMA as an example. Imagine a single-family home that is 1,500 square feet, with three bedrooms and 1.5 bathrooms. The home has an attached two-car garage. The property is in good condition, has undergone upgrades in the last few years and does not require any major repairs. The seller is hoping to list it for $350,000.

To determine if that is a fair price, let’s look at three similar homes that have sold in the same neighborhood over the last several months.

  • The first is 1,750 square feet with three bedrooms, two full bathrooms and a two-car garage and is in similar condition. It sold for $385,000.
  • The second is 1,250 square feet with two bedrooms, 1.5 bathrooms and a one-car garage, and it needs a new roof. It sold for $300,000.
  • The third home is 1,600 square feet with three bedrooms and 1.5 bathrooms, a one-car garage and is in good condition, though the air conditioning system is older. It sold for $335,000.

With this information, a Realtor can determine the general price range for the home in question — and $350,000 is probably a pretty accurate starting point.

CMAs vs. other valuation methods

A comparative market analysis is not the only way to estimate the market value of a property. There are a number of other tools that can be used to provide a similar assessment, including the following:

  • Comps: Comps is a shorthand term for comparable properties in a given area — looking at a range of comps, as in the example above, can give you a better idea of the expected value of a property. But there are a lot of variables that can skew the numbers, including things that have nothing to do with the house itself, like school district and traffic noise. Comps are used in a comparative market analysis, but they are just one piece of the puzzle.
  • Appraisals: Home appraisers are licensed, objective experts who are paid to assess the fair market value of a property. They walk through the property in person in addition to comparing it to similar properties in the area. A professional appraisal is typically required by a buyer’s mortgage lender to determine if the property is worth the amount of the loan, but they can be commissioned by a home seller as well.
  • Online estimators: An automated valuation model, or AVM, is like a quickie comparative market analysis performed by a computer program. (Think Zillow’s “Zestimate.”) It takes into account publicly available details about the property. These are not always accurate, though: Each algorithm is different, so you’re likely to get a different price estimate from each AVM you try. “Looking at home value as black and white, and without walking through a home and seeing the particulars, is very misleading for the consumer,” says Sutherlin.

Bottom line: Should I get a CMA?

If you’re selling your house, it is worthwhile to have your agent prepare a comparative market analysis. It is typically included in their services at no extra charge anyway, and it provides an important glimpse into your local market and what your property’s value may be. It might not be as accurate as a professional home appraisal, but it does provide very valuable insight.


  • In most cases, a comparative market analysis is free as part of your real estate agent’s services. In some cases, an agent may charge a nominal fee to perform one, but most of the time listing agents will offer the service at no extra charge if you choose to work with them.
  • While they are similar, these two procedures are not the same thing. A CMA is typically created by the seller’s real estate agent before listing to help determine a reasonable asking price. An appraisal is typically commissioned by the buyer, or more specifically the buyer’s mortgage lender, to confirm that the home is worth the amount of the loan. Sellers should get a CMA from their agent, and buyers will be required to get an appraisal if they are financing the purchase — however, there’s nothing stopping a buyer from requesting a CMA on a home they’re considering, and a seller can hire an appraiser to get a solid idea of their home’s worth if they wish.