A comparative market analysis, or CMA, estimates what a home will likely sell for by looking at recent sales of similar homes nearby and adjusting for the differences. It's how most agents arrive at a suggested list price, and how buyer's agents sanity-check an offer.
A CMA is not an appraisal. It uses the same basic idea, but it's an agent's pricing opinion, not a formal valuation.
1. Know the subject home
Start with the facts about the home you're pricing: address, living area, lot size, beds, baths, year built, garage, pool, view, and recent updates. Walk it if you can. Condition and updates are where online estimates miss most, and they're what you'll adjust for later.
2. Pick the comps
Pull sold listings from your MLS that are as close a match as you can find. In rough order of importance:
- Location. Same neighborhood or subdivision first. Stay on the same side of busy roads, school boundaries and other lines buyers care about.
- Recency. Closed in the last three to six months when the market allows. Go further back only when you must, and adjust for market change.
- Size and layout. Living area within roughly 10 to 20 percent, similar bed and bath count, same property type and style.
- Age and condition. Similar era and similar level of updating.
Aim for three to six good sold comps. Also look at active and pending listings: they don't prove value, but they're the competition the seller's home will face, and pendings hint at where prices are heading.
3. Adjust each comp
No comp is identical, so you adjust each comp's sale price toward the subject. The rule that trips people up: adjust the comp, not the subject. If the comp is better than the subject, subtract. If the comp is worse, add.
- Living area. Multiply the square-foot difference by a per-square-foot value for your market. Use a value for the added space, which is usually less than the comp's overall price per square foot.
- Beds and baths. A dollar amount per bedroom and per bathroom, based on what local buyers actually pay for them.
- Time. If prices have moved since the comp sold, adjust by the monthly change times the months since the sale.
- Features and condition. Garage, pool, view, lot, remodeled kitchen and so on. Keep these grounded in local sales, not guesses.
Good adjustment values come from paired sales: two similar homes that differ mainly in one feature. Your local market sets the numbers, so there's no universal figure to copy.
4. A worked example
These numbers are made up to show the math. The subject home has 1,800 square feet, 3 beds and 2 baths. The example uses $150 per square foot of difference, $10,000 per bedroom, $7,500 per bathroom, and prices rising 0.3 percent a month.
| Comp | Sale price | Difference from subject | Adjustment | Adjusted price |
|---|---|---|---|---|
| A | $520,000 | 1,900 sq ft (+100), same beds and baths, sold 2 months ago | −$15,000 + $3,120 | $508,120 |
| B | $495,000 | 1,750 sq ft (−50), 2 baths, sold 1 month ago | +$7,500 + $1,485 | $503,985 |
| C | $489,000 | 1,800 sq ft, 3 beds, 1 bath (−1), sold 4 months ago | +$7,500 + $5,868 | $502,368 |
Comp A is bigger than the subject, so its price comes down. Comps B and C are smaller or have fewer baths, so their prices go up. Every comp also gets a time adjustment for the rise since it sold. The adjusted prices land between about $502,000 and $508,000, which points to a value around $504,000 for the subject.
5. Reconcile to a price range
Don't just average. Give the most weight to the comps that needed the smallest total adjustments, since they're the closest matches. If one comp needs adjustments much larger than the others, it probably isn't a good comp.
Then check the range against the market: how the active listings are priced, how long homes are sitting, and the typical sale-to-list price ratio in the area. End with a range and a recommended list price inside it, not a single number you can't defend.
6. Present it to the seller
- Show the comps on a map with photos, so the seller sees why each was chosen.
- Show each adjustment in plain dollars. Sellers trust math they can follow.
- Explain how the active listings compete with their home.
- Pair the price with a seller net sheet, so they see what they'd actually walk away with.
7. Common mistakes
- Adjusting the wrong direction. Adjust the comp toward the subject: better comp, subtract; worse comp, add.
- Using list prices as comps. Active listings show competition, not value. Value comes from closed sales.
- Stretching for comps. A sale across a major road or in a different school zone can mislead more than it helps.
- Ignoring time. A six-month-old sale in a fast-moving market needs a time adjustment.
- Pricing to the seller's hope. An overpriced listing sits, and sitting tends to cost more than pricing right from the start.
- Treating online estimates as the answer. They're automated and can't see condition. Expect sellers to bring them up and be ready to explain the difference.
8. FAQ
What is a CMA in real estate?
A comparative market analysis (CMA) is an estimate of a home's likely market value based on recent sales of similar nearby homes, adjusted for the differences between those homes and the subject property. Agents prepare CMAs to suggest a list price to sellers or an offer price to buyers.
Is a CMA the same as an appraisal?
No. An appraisal is a formal valuation by a licensed appraiser, usually ordered by the buyer's lender, and follows appraisal standards. A CMA is an agent's informal pricing analysis. They use similar methods, but a CMA is not an appraisal and cannot replace one.
How many comps should a CMA use?
Three to six good sold comps is a common target. Fewer, closer matches are better than many loose ones. Add active and pending listings for context about current competition, but base value mostly on closed sales.
How recent should comps be?
As recent as the market allows. Sales from the last three to six months are usually preferred. In slow or rural markets you may need to go back further and adjust for how prices have changed since each sale.
Why is my CMA different from Zillow or Redfin?
Online estimates are automated models built from public records and listing data. They can't see condition, updates, views or other details an agent sees in person, so they can differ from a careful CMA in either direction. Use them as one more reference point, not the answer.
Comps and CMAs are informational and are not an appraisal.