Comparative market analysis (CMA) in real estate: A guide

When you’re getting ready to list your home or make an offer, you need a grounded view of what it’s worth. A comparative market analysis (CMA) in real estate uses recent nearby sales and similar active or pending listings to estimate value, so you can price confidently or craft a competitive offer. Unlike an appraisal, a CMA is an agent-prepared opinion of value tailored to your local market.

Key takeaways:

• A comparative market analysis estimates a home’s value by comparing recently sold, active, and pending listings to determine a realistic price for a property.
• CMAs are typically prepared by real estate agents, who pull data from the local MLS and adjust for property differences to guide pricing strategies for buyers and sellers.
• A CMA is an informal, agent-prepared opinion of value, while a home appraisal is a formal valuation performed by a licensed appraiser for a lender.

Why a CMA matters for buyers and sellers

CMAs serve both sides of a transaction, though sellers and buyers use them differently. For sellers, it’s a pricing tool. For buyers, it’s a negotiating tool. Either way, the same set of comps drives the conversation.

How sellers use a CMA

For sellers, a CMA helps you set a listing price that attracts offers without leaving money on the table. Price a home too high, and it risks becoming an overpriced house that sits on the market. Price it too low, and you may undersell your equity. A CMA gives you the data to find the middle ground.

How buyers use a CMA

For buyers, a CMA helps you avoid overpaying and gives you leverage in negotiations. If a home is listed well above what comparable sales support, a CMA gives you the facts to make a lower counteroffer, or to decide how much above asking price to offer in a competitive market.

Who can perform a CMA?

CMAs are typically prepared by licensed real estate agents, brokers, or REALTORs® who also complete them under the same nonappraisal opinion standards.

Most agents pull data from their local multiple listing service, or MLS, which combines active, pending, and recently closed sales that aren’t always visible on public listing sites.

Ask your agent to run a CMA on the property, since many provide one at no cost as part of their services.

You also can put together a basic CMA yourself using public listing data and online home value tools, but without full MLS access, a DIY analysis is typically less precise.

How agents prepare a CMA

Preparing a CMA follows a consistent process, though the details shift by property and market. From evaluating the neighborhood to landing on a final price range, each step draws on MLS data and the agent’s local expertise.

Evaluate the neighborhood

The agent starts with the neighborhood itself: boundaries, school districts, walkability, and amenities. Reviewing local housing market indicators helps frame the analysis before any specific comps come into play.

Gather property details

Next, the agent gathers details on the subject property, including its square footage, number of bedrooms and bathrooms, lot size, age, and notable features such as a pool or a finished basement.

Find comparable properties

The agent then searches for comps: homes with similar features that sold recently in the same area. The stronger the match on size, condition, and location, the more reliable the price range that follows.

Adjust for property differences

No two homes are identical, so the agent adjusts each comp’s price up or down to account for differences from the subject property, like extra space, a renovated kitchen, or the lack of a garage. Sellers who’ve made upgrades that increase home value should flag those improvements for their agent, since they can shift a comp’s adjustment in the seller’s favor.

Determine a price range

Finally, the agent reconciles the adjusted comps into a price range, weighing current market conditions like absorption rate and whether it’s a buyer’s or seller’s market to land on a recommended list or offer price.

What’s included in a CMA report?

A typical CMA report includes several standard components. Together, they walk you from the basic facts about the property to a price recommendation, so you can see exactly how the agent arrived at the number.

Subject property overview

The report opens with an overview of the property being evaluated: address, square footage, lot size, special features, bedroom and bathroom count, and year of construction. NAR’s Code of Ethics requires nonappraisal opinions to identify the subject property and the date the opinion was prepared.

Recently sold comps

Next comes a list of comparable homes that sold recently, ideally within the past several months. These are the strongest indicators of value because they show what buyers actually paid for similar homes.

Active and pending listings

The report also includes homes currently for sale and any that are active under contract but haven’t closed yet. These show the level of competition the subject property faces and how the market is trending in real time.

Adjustments for differences

The agent documents the adjustments made for each comp, often expressed on a price per square foot basis, to account for differences in size, condition, age, and features.

Market condition analysis

This section notes whether the local market favors buyers or sellers and how that’s likely to affect the recommended price.

Price recommendation

The report closes with a price recommendation, usually a range rather than a single number. Because a CMA is a nonappraisal opinion, NAR’s Code of Ethics requires that recommendation to clearly state it isn’t an appraisal.

Tips for choosing the right comps

The quality of a CMA depends entirely on the quality of the comps behind it.

How many comps should be on a CMA?

There’s no single fixed number that applies everywhere, since it depends on how much recent sales activity exists in the area. A tight cluster of very similar homes tends to produce a more reliable range than a wider pool of loosely comparable ones.

Rule of threes

Many agents follow a general rule of using at least three solid comps before finalizing a price range, rather than relying on just one. Comps that agree closely with each other carry more weight than a single outlier sale.

Comparative market analysis example

Here’s how a CMA might play out. Say you’re selling a three-bedroom, two-bathroom home with 1,800 square feet. An agent searches for other three-bed, two-bath homes of a similar size that sold recently nearby, then adjusts each comp’s price up or down for differences, like an extra half-bath or a missing garage. Once every comp is adjusted, the agent averages them into a range and factors in current market conditions before recommending where in that range to list.

When to request a CMA

There are a few common scenarios where requesting a CMA makes sense.

When selling a home. Request a CMA before you list so you know what price to set.

When making an offer to buy a home. A CMA tells you whether the listing price reflects fair market value, so you know how much to offer.

During a property tax assessment or a refinance. A CMA can help you decide whether to contest a property tax bill or whether your home’s equity supports refinancing.

If you’re buying or selling, ask your agent to run a CMA. For the third scenario, you can reach out to a real estate agency directly.

How to get a comparative market analysis

There are a couple of ways to get a CMA.

Ask a real estate agent

The most common way to get a CMA is to ask a real estate agent. Most agents provide one for free, either as part of a listing consultation or when helping a buyer prepare an offer. If you’re interviewing agents before listing your home, ask each for a CMA, since comparing their price recommendations can help you gauge their familiarity with your local market.

Use public data or online tools

You can also gather comps yourself using public property records and online home value estimators. These automated valuation models pull from public sales data to produce a quick estimate.¹ Still, they can’t account for a property’s condition or recent upgrades the way an agent can, so treat the result as a starting point rather than a final number.

How accurate is a CMA?

A CMA provides a reasonable estimate, but it’s a professional opinion, not a certified figure. Opinions of value can vary between homeowners and appraisers, which is part of why most CMAs express a price range instead of a single number.

Why CMAs can be inaccurate

A few factors can throw off a CMA’s accuracy:

• Poorly selected comps that don’t closely match the subject property
• Hidden features or defects that aren’t reflected in public listing data
• Comps that sold too long ago to reflect current market conditions
• Undisclosed factors specific to a location, like noise or a busy road, that a listing doesn’t capture

CMA vs. home appraisal: Key differences

A comparative market analysis and a home appraisal both estimate what a property is worth, but they aren’t interchangeable.

The biggest difference is who performs them. CMAs are prepared by real estate agents, while a licensed or certified appraiser must complete appraisals. For certain higher-priced mortgage loans, federal rules specifically require creditors to use a licensed or certified appraiser who conducts a physical interior visit of the property.

They’re also used differently. A CMA helps determine a listing or offer price early in the process. At the same time, an appraisal is typically ordered by a lender after an offer is accepted, to confirm that the home’s appraised value vs. market value is enough to support the loan. That difference in purpose is why CMAs tend to be less formal: a CMA is a professional opinion built on comparable sales, while an appraisal follows a stricter, standardized process.

CMA vs. property assessment

A CMA also differs from a property tax assessment, conducted by a local government official. Assessments often lag behind current market conditions, which is one reason assessed value and market value can diverge from what a CMA or appraisal would show.

How accurate is a CMA?

A CMA provides a reasonable estimate, but it’s a professional opinion, not a certified figure. Opinions of value can vary between homeowners and appraisers, which is part of why most CMAs express a price range instead of a single number.

Why CMAs can be inaccurate

A few factors can throw off a CMA’s accuracy:

• Poorly selected comps that don’t closely match the subject property
• Hidden features or defects that aren’t reflected in public listing data
• Comps that sold too long ago to reflect current market conditions
• Undisclosed factors specific to a location, like noise or a busy road, that a listing doesn’t capture

FAQ

CMAs come up often during a real estate transaction, so here are answers to some common questions.

How many comps should be on a CMA?

There’s no universal number. Agents generally look for enough closely matched, recently sold homes to support a confident price range, often starting with at least three.

How is a CMA used in real estate?

Agents use a CMA to recommend a listing price to sellers and to help buyers decide how much to offer. It’s also used during tax disputes and refinance decisions to gauge a home’s value.

How much does a CMA cost?

In most cases, a CMA costs you nothing. Real estate agents commonly prepare one for free as part of their services when you’re buying or selling. If you’re not working with an agent, some real estate professionals may charge a fee for a standalone CMA.

Can I do a CMA myself?

You can put together a basic estimate yourself using public records or an online comparative market analysis tool. Still, the real estate market changes constantly, so a professional will typically give you a more accurate result.

Is a CMA required when selling a home?

No. You aren’t required to get a CMA before selling, but skipping it isn’t a great idea. A CMA helps you set a realistic, competitive price, and it often costs nothing when you’re already working with an agent.

The bottom line: A CMA can help estimate a property’s value

A comparative market analysis is an informal but genuinely useful tool for buyers and sellers. It helps you gauge a property’s fair market value, set a listing strategy, or shape a competitive offer, grounded in real, recent sales data rather than guesswork.

Whether you’re buying or selling, working with an experienced agent gives you the best shot at a CMA that reflects your specific market.

Once you’ve settled on a price and found the right home, start your mortgage application with Rocket Mortgage.

¹ Automated valuation model (AVM) is software that uses existing property details to generate a property’s estimated value. AVM appraisals are valid only for Home Equity Loan products. Not eligible for loan amounts greater than $400,000. When eligible for an AVM, the valuation will automatically be applied. Traditional appraisals available by request. Not eligible for loans already in process. AVMs are not available in all states or on higher-priced mortgage loans that don't meet Qualified Mortgage (QM) requirements. Additional restrictions/exclusions may apply. This is not a commitment to lend.

This article is for informational purposes only and is not intended to provide financial, investment, or tax advice. You should consult a qualified financial or tax professional before making decisions regarding your retirement funds or mortgage.