What Is a Comparative Market Analysis (CMA) and How Does It Affect Home Values?
Agents build CMAs by adjusting the sale prices of nearby comps up or down — here is the line-by-line math behind the number on a listing appointment.
By Priya Natarajan-Wells · Oct 06, 2026 · 7 min read
A comparative market analysis is the pricing report an agent hands you before you list, or before you write an offer. It takes recently sold homes nearby, adjusts their prices up or down for differences in size, bedrooms and features, and uses the result to estimate what your home would likely sell for now.
It is not an appraisal and it is not binding on a lender. But it is usually the most detailed, most local number you will see before a buyer or an appraiser weighs in — and you can check the arithmetic yourself.
What a Comparative Market Analysis (CMA) Means
A CMA is a written estimate of what a home would likely sell for right now, built by lining it up against nearby homes that recently sold and adjusting for the differences between them.
Zillow (undated) describes it as a report prepared by a real estate agent to help a client determine the value of a home, analyzing three or more recently sold properties similar in size, location, age and quality.
It affects two parties directly:
- Sellers use it to set a listing price. The CMA is the document behind the number an agent suggests at a listing appointment, and it is where you should push back if the suggested price feels high or low.
- Buyers use it to make competitive offers (Zillow, undated). It tells you whether an asking price sits above or below what comparable homes actually closed at.
Owners who are not transacting get indirect use from it: refinancing, estate planning and tax-assessment appeals all start with a value estimate, though lenders and assessors will rely on their own processes, not your agent's CMA.
Three distinctions matter:
- A CMA is not a formal appraisal. Agents prepare CMAs using market data and local knowledge, while licensed appraisers conduct appraisals for lenders (Luxury Presence, undated). Appraisers are state-licensed or state-certified and follow the Uniform Standards of Professional Appraisal Practice (USPAP), the national standards authorized by Congress in 1989 through FIRREA (EffectiveAgents, undated). CMAs are not exclusive to licensed appraisers and do not require an official license to conduct (Indeed, undated).
- A CMA is not a broker's price opinion. A BPO is similar, but the professional is usually paid to prepare it, and it is more thorough than most CMAs, pulling six comparable properties — three active, three sold — from the MLS (Wikipedia, undated).
- A CMA is not an automated estimate. An automated valuation model (AVM) does not involve a site visit, so it does not account for condition or upgrades (Wikipedia, undated).
What a CMA produces varies with the market: comps are easy to find in a tract subdivision of similar homes, and much harder for a rural acreage property, a one-off architect-designed house, or a condo where HOA fees and floor level change value between units in the same building.
How a CMA Is Calculated, With a Real Example
The process runs through six steps: property data collection, comp selection, comparison, price adjustments, data consolidation, and client presentation (Luxury Presence, undated). Recommended comp-selection criteria include sales within the last three to six months and location within a half-mile to one mile of the subject property (Luxury Presence, undated). A thorough CMA typically uses three to six recently sold comparables plus relevant active and pending listings for context (EffectiveAgents, undated); Redfin (undated) describes 3–5 sold homes alongside active and pending sales.
The rule that trips people up: adjustments are always made to the comparable's price, never to the subject. An inferior comp is adjusted upward, a superior comp is adjusted downward (EffectiveAgents, undated). If a comp has one fewer bedroom than your home, the agent adds value to that comp's sale price (Luxury Presence, undated).
Say your home is 2,000 sq ft, 4 bedrooms, 2 baths, with an attached garage. Using a bedroom value of $3,000, as in The CE Shop's worked example (undated), and a garage adjustment of $8,000 set by the agent from local sales:
| Comp | Sold price | Size and features | Adjustment | Adjusted price | Adjusted $/sq ft |
|---|---|---|---|---|---|
| A | $392,000 | 1,960 sq ft, 3 bed, garage | +$3,000 (one fewer bedroom) | $395,000 | $201.53 |
| B | $415,000 | 2,100 sq ft, 5 bed, garage | −$3,000 (one extra bedroom) | $412,000 | $196.19 |
| C | $398,000 | 1,900 sq ft, 4 bed, no garage | +$8,000 (no garage) | $406,000 | $213.68 |
After adjustments, each comp's adjusted sales price is divided by its square footage to get an adjusted price per square foot, which is used to estimate a base price for the subject property (The CE Shop, undated).
- Average the three adjusted figures: ($201.53 + $196.19 + $213.68) ÷ 3 = $203.80 per sq ft.
- Multiply by your home's size: $203.80 × 2,000 sq ft = $407,600.
- Present it as a range, not a point: roughly $400,000 to $410,000, before accounting for condition, lot, and what active and pending listings are asking.
Some agents adjust raw square-footage gaps in dollars instead of working in price per square foot. A typical square-footage adjustment runs $50 to $200 per square foot depending on market and price tier (EffectiveAgents, undated) — at $100, Comp A's 40 sq ft shortfall would be worth $4,000. Pick one method; using both double-counts size.
What This Means for You
- If the CMA supports $400,000–$410,000 and you want to list at $435,000, decide before launch how many days you will hold that price and what the first reduction will be. No agent can guarantee a sale price, a closing date, or how long a given home sits.
- If an online estimate disagrees with the CMA, check the error band before you argue. Redfin reports a median error rate of 3.02% for its home-value estimate on on-market homes and 8.69% off-market (Redfin, cited by Houwzer, undated). On a $407,600 home that is about $12,300 and $35,400 respectively — so treat an AVM as a range, not a value.
- If fewer than three sold comps fall inside three to six months and a half-mile to one mile (Luxury Presence, undated), ask the agent to widen the radius or time window on paper, and expect a wider value range as a result. Consider paying for a BPO, which pulls six comps (Wikipedia, undated), or an appraisal.
- If you are buying with a mortgage and the CMA says $407,600 while the seller wants $435,000, settle your appraisal-gap position before you sign. The lender uses the appraiser's number, not the CMA.
- If total adjustments move a comp by more than a few percent of its sale price, ask to see each line item. A single unexplained $20,000 adjustment on a $400,000 comp moves the whole estimate.
- If you need a defensible value for a divorce, estate or tax dispute, budget for an appraisal instead. The average home appraisal costs about $400, with $410 to $590 in high-demand states such as New Mexico, Oregon and Washington (Zillow, undated). Ask a licensed attorney or tax professional which one your situation requires.
Frequently asked questions
Is a CMA the same thing as an appraisal?
No. An appraisal is conducted by a state-licensed or state-certified appraiser following USPAP, the national standards authorized by Congress in 1989 through FIRREA (EffectiveAgents, undated), and it costs money — about $400 on average, rising to $410–$590 in high-demand states like New Mexico, Oregon and Washington (Zillow, undated), with the National Association of Realtors' 2023 Appraisal Survey putting the average closer to $500 (HomeLight, undated). A CMA requires no official license (Indeed, undated) and agents normally prepare one without charge for a prospective client.
How many comparable sales should a CMA include?
At minimum three recently sold properties similar in size, location, age and quality (Zillow, undated). Redfin (undated) describes 3–5 sold homes plus active and pending listings, and EffectiveAgents (undated) puts a thorough CMA at three to six sold comps with actives and pendings for context. Comps should generally have sold within the last three to six months and sit within a half-mile to one mile of the home (Luxury Presence, undated) — in a dense condo market that radius may be two blocks, in a rural one it may be unachievable.
Why does my CMA differ from a Zestimate or other online estimate?
An AVM does not involve a site visit, so it misses condition and upgrades (Wikipedia, undated). The gap can be large: Redfin reports a median error rate of 8.69% on off-market homes and 3.02% on on-market homes (Redfin, cited by Houwzer, undated), which on the $407,600 example works out to roughly $35,400 and $12,300. An automated estimate is not a market or appraised value.
Who can prepare a CMA for me?
Any real estate agent can — no license beyond their real estate licence is required (Indeed, undated). Note that REALTOR® is a federally registered trademark for agents and brokers who have joined the National Association of Realtors, agreed to its Code of Ethics and pay dues; not all agents are REALTORS® (Luxury Presence, undated). If you want a more thorough, paid report, a BPO pulls six comps — three active, three sold — from the MLS (Wikipedia, undated).
Sources
- Zillow — What Is a Comparative Market Analysis (CMA)?
- Luxury Presence — CMA Real Estate Guide: How to Build a Comparative Market Analysis in 2026
- The CE Shop — What Is a Comparative Market Analysis (CMA) & How Do Real Estate Agents Use It?
- EffectiveAgents — How to Read a Comparative Market Analysis (CMA)
- Redfin — What is a Comparative Market Analysis (CMA)?
- Wikipedia — Broker's price opinion
- Indeed — What Is Comparative Market Analysis (CMA) in Real Estate?
- Zillow — Home Appraisal Cost: How Much Is a Home Appraisal?
- HomeLight (citing NAR 2023 Appraisal Survey) — Home Appraisal Costs, Uses, and What to Expect from the Process
- Redfin (cited by Houwzer) — Can the Redfin Estimate be Trusted? What Home Sellers Need to Know
- Luxury Presence — Realtor vs Real Estate Agent: A Breakdown of the Differences in 2026
Written by
Priya Natarajan-Wells
Priya writes about first-time buyers and the emotional math of mortgages. She likes tracing how a single rate change ripples through an ordinary family's plans. Her pieces tend to start with a kitchen table, not a spreadsheet.
