Comparative Market Analysis (CMA)

Discover how a Comparative Market Analysis (CMA) helps determine a property’s value in Canadian real estate and supports smart pricing and negotiations.

Comparative Market Analysis (CMA)



What is Comparative Market Analysis (CMA)?

A Comparative Market Analysis (CMA) is a report prepared by a real estate professional that estimates a property’s market value based on recent sales of similar homes in the area.

Why Comparative Market Analysis (CMA) Matters in Real Estate

In Canadian real estate, a CMA helps sellers price their homes competitively and assists buyers in making informed offers. It’s based on ‘comps’—comparable properties that have recently sold or are currently listed.

A typical CMA evaluates:
- Recently sold homes (typically within 3–6 months)
- Active listings (current asking prices)
- Expired listings (homes that didn’t sell)
- Property features (size, age, condition, location)

CMAs are not formal appraisals, but they provide a data-driven pricing strategy. REALTORS® use their expertise and local market knowledge to interpret the data and make pricing recommendations.

For sellers, a CMA can help avoid overpricing or underpricing. For buyers, it can reveal whether a home is fairly valued. CMAs are especially important in competitive or fast-moving markets where price accuracy can impact sale outcomes.

A well-prepared CMA builds confidence for all parties in a transaction and supports stronger negotiations and outcomes.

Example of Comparative Market Analysis (CMA) in Action

A REALTOR® prepares a CMA for a seller showing that three similar homes in the area sold for $850,000–$875,000. They recommend listing the property at $860,000.

Key Takeaways

  • Estimates property value based on local sales data.
  • Used by sellers to set prices and by buyers to evaluate offers.
  • Compares recent and similar property sales.
  • Created by a licensed REALTOR®.
  • Not a formal appraisal, but a strategic pricing tool.

Related Terms

  • Market Value
  • Appraisal
  • Listing Price
  • Fair Market Value
  • Pricing Strategy

Additional Terms

Budgeting

Budgeting in real estate refers to the process of forecasting and managing income and expenses associated with owning, operating, or developing a property.. more

Tenant Improvements

Tenant improvements refer to custom modifications or build-outs made to a leased space to suit the tenant’s operational needs, often negotiated as. more

Highest and Best Use

Highest and best use refers to the reasonably probable use of a property that results in the highest value, provided it is legally permissible,. more

Gross Lease

A gross lease is a commercial lease where the tenant pays a fixed rent, and the landlord covers most or all operating expenses such as property. more

Brownfield

A brownfield is a property that was previously used for industrial or commercial purposes and is now vacant or underused, often requiring. more

Record of Site Condition (RSC)

A Record of Site Condition (RSC) is a formal document filed with a provincial environmental authority certifying that a property meets required. more

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