# Comparative market analysis

> A comparative market analysis (CMA) is a report a real estate agent prepares to estimate a home’s market value from recent sales, pending deals and active listings of similar nearby homes. It guides a list price or an offer.

Also called: CMA, comps report, market analysis, competitive market analysis. Topic: Selling a home.

A CMA is the main tool agents use to set a [list price](https://brokerandagent.com/glossary#list-price) or shape an [offer](https://brokerandagent.com/glossary#offer). It compares a home with nearby [comparables](https://brokerandagent.com/glossary#comparables) that sold recently, then adjusts for the differences to arrive at a likely price range.

## What’s in a comparative market analysis?

A CMA usually looks at three groups of homes. Sold homes show what buyers actually paid, and they carry the most weight. Pending sales show where prices are heading, since they went under contract recently but haven’t closed. Active listings show the competition buyers will compare a home against.

For each comp, the report lists the price, size, [price per square foot](https://brokerandagent.com/glossary#price-per-square-foot), bedrooms and bathrooms, lot, age, condition and [days on market](https://brokerandagent.com/glossary#days-on-market). Agents usually pull this from the [multiple listing service](https://brokerandagent.com/glossary/multiple-listing-service), which has more detail than public sites, including sale prices in states where they aren’t public record.

## How are comparables chosen and adjusted?

Good comps are nearby, similar in size, age and style, and recent. Appraisers working on loans sold to Fannie Mae, for example, must report at least three closed sales and should generally use sales from the last 12 months. Agents often follow a similar approach and lean on the most recent sales when there are enough of them.

No two homes match, so each comp is adjusted toward the home being priced: add value to a comp that lacks the home’s extra bedroom or garage, subtract value from a comp with a pool the home doesn’t have. The adjusted prices then point to a range rather than one number.

## How is a CMA different from an appraisal?

A CMA is an agent’s opinion, usually prepared free to help price a home or write an offer. An [appraisal](https://brokerandagent.com/glossary#appraisal) is a formal valuation by a licensed or certified appraiser, usually ordered by the buyer’s lender to confirm the home supports the loan. Appraisers follow strict rules on comps and adjustments; an agent has more room to weigh buyer demand and competing listings.

An [automated valuation model](https://brokerandagent.com/glossary#automated-valuation-model), the kind of estimate you see on home search sites, is different again. It’s computed from data without anyone seeing the home, so it can miss condition, updates and the details of a particular street.

## How do you use a CMA when selling?

Use the CMA to set a list price inside the range the comps support, then keep it current. Ask your agent to update it as new sales close nearby. If showings are thin after the first few weeks, the newer comps help decide whether a [price reduction](https://brokerandagent.com/glossary#price-reduction) makes sense.

## Example: pricing a 2,000-square-foot home from three sales

| | |
| --- | --- |
| Comp A: 1,850 sq ft, sold for $370,000 | $200 per sq ft |
| Comp B: 2,100 sq ft, sold for $430,500 | $205 per sq ft |
| Comp C: 2,000 sq ft, sold for $390,000 | $195 per sq ft |
| Average price per square foot | $200 |
| Starting point for 2,000 sq ft | $400,000 |
| Range after adjustments for condition and features | $395,000 to $410,000 |

Hypothetical numbers. Price per square foot is only a starting point; adjustments for condition, lot, layout and features move the final range.

## Common mistakes

- Pricing from active listings alone. Asking prices show the competition, not what buyers paid.
- Using comps from a different neighborhood or school zone because the square footage matches.
- Treating an online home value estimate as a CMA. It hasn’t seen the home’s condition or upgrades.
- Expecting the appraisal to match the CMA exactly. Appraisers choose their own comps and adjustments.

## Questions

### How much does a CMA cost?

Agents usually provide one free when they’re competing to list a home or helping a buyer write an offer. An appraisal, by contrast, is a paid service, usually ordered by the lender.

### How many comparables should a CMA use?

There’s no fixed number; a handful of close matches beats a long list of loose ones. Appraisals for loans sold to Fannie Mae must include at least three closed sales.

### How often should a CMA be updated?

Whenever new sales close nearby, and regularly while a home is on the market. In a fast-moving market, a CMA can go stale within weeks.

Calculator: [Seller net sheet calculator](https://brokerandagent.com/tools/seller-net-sheet-calculator)

## Related terms

- [Comparables](https://brokerandagent.com/glossary#comparables): Recently sold homes similar to the one being priced in location, size, age and condition, used to estimate its market value. Agents use them in a comparative market analysis, and appraisers use them in an appraisal.
- [List price](https://brokerandagent.com/glossary#list-price): List price is the price a seller asks for a home when it goes on the market. It’s the starting point for offers, not the final price, and it can change if the home doesn’t sell.
- [Appraisal](https://brokerandagent.com/glossary#appraisal): An appraisal is a licensed or certified appraiser’s written opinion of a home’s market value, based on its condition and recent comparable sales. Lenders require one on most mortgages to confirm the home supports the loan.
- [Automated valuation model](https://brokerandagent.com/glossary#automated-valuation-model): An automated valuation model (AVM) is software that estimates a home’s value from public records, recent sales and listing data. Online home value estimates are AVMs; they’re quick but can miss condition, upgrades and local detail.
- [Price per square foot](https://brokerandagent.com/glossary#price-per-square-foot): Price per square foot is a home’s price divided by its finished living area. A $400,000 home with 2,000 square feet comes to $200 per square foot, a quick way to compare similar homes in the same area.
- [Days on market](https://brokerandagent.com/glossary#days-on-market): Days on market (DOM) is how long a home has been listed for sale, usually counted from the day it goes active on the MLS until it goes under contract. A long count can point to a pricing problem.

## Sources

- [Fannie Mae Selling Guide B4-1.3-08: Comparable sales](https://selling-guide.fanniemae.com/sel/b4-1.3-08/comparable-sales)
- [CFPB: Quality control standards for automated valuation models](https://www.consumerfinance.gov/rules-policy/final-rules/quality-control-standards-for-automated-valuation-models/)

Checked 2026-10-02 by the Broker & Agent team. General information, not legal, tax or lending advice.

Source: https://brokerandagent.com/glossary/comparative-market-analysis