What is a CMA - Real Estate Jargon Explained

CMA stands for Comparable Market Analysis.

A CMA is a method that realtors use to estimate the value of residential properties. The CMA provides a range of values and helps a seller set a listing price for their property. It also helps a buyer understand the value of the home.

Real estate agents create CMAs by looking at comparables, or “comps” which are recently sold properties that are similar to your own home. If you’re a home buyer, we’ll compare homes to the one you want to make an offer on. Similarity is the key to this process, since it gets you closest to an apples-to-apples comparison.

Let’s say your own home has three bedrooms, two baths, and is around 2,000 square feet. Your neighbor’s down the block is also a three-bedroom, two-bath house clocking in at 1,950 square feet—and it sold last week for $300,000.

Odds are, your place is worth about that same price.

Comparable homes should be in the same or similar neighborhood, have a similar square footage, and around the same number of bedrooms, bathrooms, features, and upgrades.

But since most houses are at least a little bit unique, how identical do they need to be?

  • A general rule is that comps should ideally have:

  • the same number of bedrooms and bathrooms,

  • be located within a quarter-mile of your home,

  • and within 200 square feet of your home’s size.

  • Whenever possible, they should be in your ZIP code and school district too.

It’s also important to make sure your CMA analyzes recent sales. Markets can change quickly, so try not to go back any more than six months.

Another mistake? Looking at listing prices on homes and assuming those are realistic comps. Those numbers may be inflated based on home sellers’ hopes of what they’ll get rather than reality.

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Jessie Bryan