What is the purpose of a comparative market analysis (CMA)?

A comparative market analysis (CMA) is primarily used to determine a property's market value based on recent sales of similar properties in the area. This process involves evaluating various factors such as location, size, condition, and features of comparable properties, also known as "comps." By analyzing these metrics, real estate professionals can provide sellers with a recommended listing price or help buyers understand what a property is worth in the current market.

This method is essential for both buyers and sellers. For sellers, it helps in setting a competitive price that reflects the current market conditions, thereby maximizing their chances of a successful sale. For buyers, it offers insight into what similar homes have sold for, aiding in making an informed purchasing decision. The information provided through a CMA helps align expectations with the realities of the market, ensuring that parties on both sides are grounded in realistic pricing strategies.

In contrast, assessing the structural integrity of a building relates more to home inspections and physical evaluations rather than market analysis. Identifying potential buyers is a marketing effort that falls outside the scope of a CMA, which focuses specifically on value assessment. Establishing a property's tax assessment value is typically handled through a different process involving local tax authorities, rather than through the comparative framework of a CMA.