Comparative Market Analysis (CMA) Basics

Three data sets do the work, and they answer three different questions. Closed sales answer what buyers actually paid for comparable property, which is the only evidence of value the market has already validated. Current listings answer what a buyer could choose instead, which sets the practical ceiling. Listings that expired or were withdrawn answer where the market stopped responding.

Weight follows reliability. Closed sales carry the most, because money changed hands. Current listings carry less, because an asking price is a hope until someone accepts it. Expired listings carry no value evidence at all, but they are the clearest signal of what buyers refused, and a pricing recommendation that ignores them tends to produce another expiration.

Two further inputs shape the conclusion. Market direction, read from inventory, absorption and how long property is taking to sell, tells you whether older sales understate or overstate today. And the condition of the subject property itself, which no data feed records, which is why an analysis prepared without seeing the property is preliminary by definition.

An appraisal is prepared by an appraiser credentialed by the state, working under the Uniform Standards of Professional Appraisal Practice, usually at the request of a lender that intends to rely on it in a credit decision. The standards govern methodology, the scope of work, the development of the opinion and the form of the report, and the appraiser is accountable to an appraiser regulatory board for all of it.

A comparative market analysis is prepared by a licensee for a seller or buyer making a pricing decision. It uses a similar comparison logic, and that resemblance is exactly the hazard: it produces a document that looks authoritative while carrying none of the accountability. No lender will fund against it, and no party should treat it as an independent valuation.

The rule that follows is short. Do not call it an appraisal, do not describe yourself as appraising, and do not present the number as an appraised value. In many jurisdictions those words are reserved by statute, and using them without the credential is unlicensed activity regardless of how good the analysis is.

One further limit is worth carrying into the exam: independence. An appraisal is supposed to be disinterested. A licensee preparing an analysis while competing for the listing is not, which is the structural reason the two documents are treated differently even when they reach the same figure.