How to Read a Comparative Market Analysis (CMA) | Consumer's Guide

What Is a CMA in Real Estate?

A comparative market analysis, commonly called a CMA, is a detailed report that a real estate agent prepares to estimate the current market value of a property. Whether you are buying a home and need to determine a fair offer price, or selling and want to set a competitive listing price, the CMA is the foundational document that shapes your pricing strategy.

At its core, a CMA relies on the principle of substitution: a buyer will not pay more for one property when a similar property is available for less. Your agent identifies recently sold homes (called "comps" or "comparables") that closely resemble the property being evaluated, then adjusts the sale prices of those comps to account for differences. The result is a recommended value range backed by real transaction data from your local market.

CMA vs. Appraisal: Understanding the Difference

Consumers often confuse a CMA with a formal appraisal, but they serve different purposes and carry different levels of authority. A CMA is prepared by a licensed real estate agent using MLS data and professional market knowledge. An appraisal is conducted by a state-licensed or state-certified appraiser who follows the Uniform Standards of Professional Appraisal Practice (USPAP), the national standards authorized by Congress in 1989 through the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA). Lenders require a formal appraisal before finalizing your mortgage, while a CMA is the tool your agent uses to guide your pricing decisions before and during the transaction.

Feature	CMA	Formal Appraisal
Prepared by	Licensed real estate agent	State-licensed/certified appraiser
Standards	Agent's professional judgment and MLS data	USPAP (federally recognized)
Cost	Typically free (part of agent's service)	$350 - $600+ (paid by buyer or seller)
Purpose	Set listing price or determine offer price	Verify value for lender financing
Legal standing	Advisory opinion, not legally binding	Required for federally related transactions
Turnaround	Same day to 48 hours	1-3 weeks

CMA vs. Automated Valuation Models (AVMs)

You may have already checked your home's value on sites like Zillow or Redfin. These platforms use automated valuation models, or AVMs, which are algorithm-driven estimates based on public records and recent transactions. Zillow states that its Zestimate falls within 2% of the eventual selling price for roughly half of homes. While AVMs provide a useful starting point, they cannot account for interior condition, recent upgrades, or hyperlocal factors such as street noise, views, or lot placement within a neighborhood. A CMA prepared by a knowledgeable agent fills those critical gaps with on-the-ground expertise.

How to Get a Comparative Market Analysis

Getting a CMA is straightforward, and in most cases it costs you nothing. Here are the most common ways consumers obtain a comparative market analysis:

1. Request one from a listing agent. When you are preparing to sell, the agents you interview during your listing agent selection process will each prepare a CMA as part of their listing presentation. This is standard practice and allows you to compare how different agents value your home.
2. Ask your buyer's agent. If you are considering making an offer on a home, your buyer's agent can prepare a CMA on that specific property to help you determine a competitive offer price. A strong agent will do this proactively before you write your offer.
3. Contact an agent through a matching service. Platforms like EffectiveAgents connect you with agents who have a verified track record in your local market. These agents will provide a CMA as part of their initial consultation.
4. Run a preliminary analysis yourself. You can review recently sold homes on public listing sites to get a rough sense of value, but recognize that your analysis will lack the MLS data, agent remarks, and adjustment expertise that a professional CMA includes.

Anatomy of a CMA Report: What Every Section Means

A professional CMA report can range from a few pages to a comprehensive packet with photographs, charts, and detailed market data. Regardless of format, every real estate CMA should contain several key components. Here is what to look for and how to evaluate each section.

Subject Property Details

The CMA begins with a profile of the property being evaluated (the "subject"). This section should include the address, square footage, lot size, number of bedrooms and bathrooms, year built, condition rating, and any notable features such as a pool, garage, finished basement, or recent renovations. Review this section carefully: if any details about your home are incorrect, the entire CMA could be skewed. A missing bathroom, incorrect square footage, or overlooked renovation can shift the estimated value by thousands of dollars.

Comparable Properties (Comps)

This is the most important section of any comparative market analysis. The comps your agent selects form the foundation of the pricing recommendation. A thorough CMA typically includes three to six comparable properties that have recently sold, along with relevant active and pending listings for market context.

What Makes a Good Comp?

The quality of a CMA depends entirely on how closely the comparable properties match the subject. Agents select comps based on multiple criteria, and the best comps are those that require the fewest adjustments. Here is how professionals evaluate potential comparables:

Criteria	Ideal Standard	Maximum Acceptable Range
Distance from subject	Same subdivision or within 0.5 miles	1 mile in urban areas, 5 miles in rural
Sale date	Within 3 months	6 months (up to 12 in rural/slow markets)
Square footage	Within 10% of subject	Within 20% with adjustments
Year built	Within 5 years	Within 10-15 years with condition adjustments
Bedrooms/bathrooms	Same count	Within 1 bedroom or bathroom difference
Property type	Same type (single-family, condo, townhouse)	No substitution recommended
Condition/updates	Similar level of renovation	Adjustable, but large gaps reduce reliability

Understanding the Adjustment Grid

Because no two homes are identical, agents adjust the sale price of each comp to reflect how it differs from the subject property. This adjustment process is the part of a CMA that most consumers find confusing, but it follows a logical framework once you understand the direction of the adjustments.

Common CMA Adjustments Explained

Sample Adjustment Grid

Here is a simplified example showing how adjustments work in practice. Assume the subject property is a 3-bedroom, 2-bathroom home with 1,800 sq ft, a 2-car garage, and an updated kitchen:

Feature	Subject	Comp 1 ($385,000)	Comp 2 ($410,000)	Comp 3 ($372,000)
Sq Ft	1,800	1,750 (+$5,000)	2,000 (-$20,000)	1,820 ($0)
Bedrooms	3	3 ($0)	4 (-$8,000)	3 ($0)
Garage	2-car	2-car ($0)	2-car ($0)	1-car (+$10,000)
Kitchen	Updated	Updated ($0)	Updated ($0)	Original (-$0, needs update → +$18,000)
Pool	No	No ($0)	Yes (-$15,000)	No ($0)
Adjusted Price		$390,000	$367,000	$400,000

In this example, the adjusted values suggest a market value range of approximately $367,000 to $400,000. Your agent would likely recommend a listing price within or near this range, weighting the comps that required fewer adjustments more heavily.

Why Two Agents Can Produce Different CMAs From the Same Data

One of the most confusing aspects of the CMA process is that two experienced agents can look at the same neighborhood and arrive at different price recommendations. This does not necessarily mean one agent is wrong. The comparative market analysis process involves professional judgment at several points, and reasonable professionals can disagree.

Different Comp Selection

The single biggest source of variation between CMAs is which comparable properties each agent selects. One agent might prioritize a comp that sold three weeks ago two streets over, while another might choose a comp from the same street that sold five months ago. Both choices have merit: recency favors the first, and proximity favors the second. The "right" answer depends on local market conditions and how quickly prices are changing.

Different Adjustment Values

Even when two agents use the same comps, they may apply different dollar amounts for the same adjustments. One agent might value a finished basement at $20,000 based on their analysis of paired sales data, while another might calculate $28,000 based on different paired comparisons. Fannie Mae's Selling Guide reinforces that adjustments should be market-based and reflect actual buyer behavior, not arbitrary rules of thumb. This guidance applies to formal appraisals, but the same principle holds for CMAs: adjustments should be derived from local market evidence, not generic formulas.

Different Weighting of Comps

After making adjustments, agents assign different levels of importance to each comp based on overall similarity to the subject. An agent who believes location is the dominant factor in your neighborhood may give more weight to a nearby comp, even if it required more adjustments for size differences. Another agent may prioritize the comp with the fewest total adjustments, regardless of distance.

Neither agent is necessarily wrong. What matters is that each agent can clearly explain their reasoning and show you the data behind their conclusions. If an agent cannot explain why they chose specific comps or how they calculated an adjustment, that is a red flag regardless of the price they recommend.

CMA Validator Checklist: Rate Each Comp

Use this checklist to evaluate the quality of each comparable property in your CMA. For each comp, assess the four key criteria below and assign a rating of Strong, Acceptable, or Weak. A credible CMA should have at least two or three comps that rate as Strong or Acceptable across all categories.

Red Flags: How to Spot a Manipulated CMA

Most agents prepare honest, well-researched CMAs. However, a practice known as "buying the listing" occurs when an agent deliberately inflates the CMA price to win your business as a seller. The agent presents an unrealistically high listing price, knowing it will attract your signature on the listing agreement, then pressures you for price reductions after the home sits unsold for weeks. According to the National Association of REALTORS®, correctly priced properties sell significantly faster than overpriced ones, making it critical to identify a manipulated CMA before you commit.

• The suggested price is significantly higher than competing CMAs. If one agent's price is 10% or more above the others with no clear explanation, they may be buying your listing. Ask them to walk you through each comp and explain the price gap.
• Comps are from outside the neighborhood. Cherry-picking sales from a more expensive neighborhood nearby while ignoring closer, less favorable comps is a common manipulation tactic. Every comp should be geographically relevant.
• Only "favorable" sales are included. A thorough CMA should include lower-priced comps alongside higher ones. If every comp conveniently supports a high price, ask why certain obvious sales were excluded.
• Stale or expired comps. Using sales from 9 to 12 months ago when more recent data is available can distort the analysis, especially in a market where prices have softened.
• Excessive or unsupported adjustments. If the total adjustments on any single comp exceed 15-25% of that comp's sale price, the comp may be too dissimilar to provide a reliable comparison. While Fannie Mae has officially eliminated fixed percentage limits on adjustments for formal appraisals, the industry still recognizes that excessive adjustments reduce reliability.
• Active listings used as "comps." Homes currently listed for sale are not comps because they have not been tested by the market. A home listed at $450,000 might sell for $420,000. Active listings show current competition, not confirmed market value.
• No mention of days on market or price reductions. A good CMA notes if a comp originally listed much higher and took price cuts before selling. This context reveals what the market actually accepted versus what the seller initially hoped for.
• The agent dismisses your questions. A competent agent will gladly walk you through every page of the CMA and explain their reasoning. Defensiveness or vagueness when you ask about comp selection or adjustments suggests the analysis may not hold up under scrutiny.

How Overpricing Hurts Sellers

When a home is priced above market value, it tends to sit on the market longer, accumulating days on market that signal to buyers and their agents that something may be wrong with the property. Research from NAR consistently shows that homes requiring price reductions end up selling for less than they would have if priced correctly from the start. The first two weeks on market generate the most buyer interest, and an overpriced home misses that critical window of visibility. A data-driven CMA protects you from this trap.

How to Use a CMA as a Buyer or Seller

For Sellers: Setting the Right Listing Price

Your CMA should produce a recommended value range, not a single number. Within that range, your pricing decision depends on your goals. If you need to sell quickly, pricing at or slightly below the middle of the range can generate multiple offers and competitive bidding. If you have time and your market favors sellers, pricing at the top of the range may be appropriate. A skilled listing agent will discuss these strategies and help you understand the tradeoffs. For more on effective pricing strategies, consult an agent with a strong sale-to-list price ratio in your area.

For Buyers: Evaluating the Asking Price

When your buyer's agent prepares a CMA on a home you want to purchase, compare the CMA's adjusted value range to the seller's asking price. If the asking price falls within the CMA's range, the home is likely priced fairly. If the asking price exceeds the CMA's adjusted values, you have leverage to negotiate. Your agent can present the CMA data to support a lower offer without relying on emotion or guesswork.

For Both: Questions to Ask Your Agent About the CMA

Regardless of whether you are buying or selling, here are questions that will help you evaluate the quality of your real estate CMA:

Frequently Asked Questions About Comparative Market Analysis

What is a CMA in real estate?

A CMA (comparative market analysis) is a report prepared by a real estate agent that estimates a property's current market value by comparing it to similar recently sold properties in the same area. The agent selects comparable homes, adjusts their sale prices for differences in features, size, condition, and location, and uses the adjusted prices to recommend a value range for the subject property.

How much does a comparative market analysis cost?

In most cases, a CMA is free. Real estate agents prepare CMAs as part of their service when working with buyers or sellers. If you are interviewing listing agents, each will typically prepare a CMA at no charge as part of their listing presentation. Unlike a formal appraisal, which can cost $350 to $600 or more, a CMA is a complimentary advisory tool.

How many comps should a good CMA include?

A well-prepared CMA typically includes three to six comparable sold properties. Using too few comps can produce an unreliable estimate, while using too many (especially weaker matches) can dilute the analysis. In addition to sold comps, a thorough CMA may include relevant active and pending listings for market context, though these are not true indicators of confirmed market value.

How recent should the comps in a CMA be?

Ideally, comps should have sold within the past three to six months. In active markets where prices are changing quickly, more recent sales carry greater weight. In rural areas or slower markets where fewer transactions occur, agents may need to extend the search window to 12 months, but they should account for market changes during that period through time-based adjustments.

Can I do my own comparative market analysis?

You can perform a basic home market analysis using publicly available data from real estate websites, reviewing recently sold homes that are similar to the property in question. However, a professional CMA from a licensed agent will be more accurate because agents have access to MLS data, nonpublic transaction details, agent remarks, and local market knowledge that public sites do not provide.

Why would two agents give me different CMA values?

Two agents can produce different CMAs because the process involves professional judgment at multiple points. Different comp selection, different adjustment calculations, and different weighting of comparables all contribute to variation. Minor differences of 2 to 5 percent are normal. Larger discrepancies suggest fundamentally different interpretations of market data and warrant a detailed comparison of each agent's methodology.

What is the difference between a CMA and an appraisal?

A CMA is prepared by a licensed real estate agent and provides an advisory opinion of value for pricing purposes. An appraisal is conducted by a state-licensed or state-certified appraiser who follows USPAP (Uniform Standards of Professional Appraisal Practice), the national standards authorized by Congress. Lenders require formal appraisals for mortgage financing, while CMAs are used to guide listing and offer pricing decisions.

What are the biggest red flags in a CMA?

The biggest red flags include a suggested price significantly higher than competing CMAs (which may indicate the agent is "buying the listing"), comps cherry-picked from more expensive neighborhoods while ignoring closer sales, exclusively favorable comps with no lower-priced sales included, stale comps when recent data is available, active listings used in place of sold comps, and an agent who cannot clearly explain their comp selection or adjustment methodology.