Chapter 1
Brokerage Operations and Management
Course: Alaska Real Estate Exam Prep
Subject: National Real Estate Broker Exams Prep
Chapter: Valuation Appraisal And Market Analysis
Comparative Market Analysis and Appraisals
A comparative market analysis, commonly called a CMA, and an appraisal both estimate property value, but they serve different professional purposes and carry different legal significance. A CMA is usually prepared by a real estate broker or salesperson to assist with pricing, listing, offers, negotiation, or market positioning. An appraisal is an independent opinion of value prepared by a licensed or certified appraiser under professional appraisal standards.
Both tools rely on market evidence, comparable properties, adjustments, and judgment. However, an appraisal is more formal, regulated, and frequently required for lending, litigation, taxation, estate matters, or government-related transactions. A CMA is primarily a brokerage tool used to help clients make informed pricing decisions.
Comparative Market Analysis
A comparative market analysis estimates probable selling price by comparing a subject property with similar properties that recently sold, are currently listed, or failed to sell. It is based primarily on the sales comparison approach.