A CMA is an argument, not a fact. Here is how to tell whether the argument holds.
What a CMA is
A comparative market analysis estimates value by looking at what genuinely similar homes recently sold for, then adjusting for the differences. It is not an appraisal and carries no lender weight - but a good one is often closer to reality than a bad appraisal.
The whole exercise rests on the choice of comparables. Change the comps and you change the answer.
Check the comparables first
Look at what is being compared before you look at the conclusion. Comps should be recent, close by, and genuinely similar in size, age, condition and lot.
A home half a mile away can sit in a different school zone or on a very different street. A home twice the age is not comparable regardless of square footage.
- Are the sales recent - months, not years?
- Are they in the same neighbourhood and attendance zone?
- Are size, age, condition and lot genuinely similar?
- Are these closed sales, or merely asking prices?
Look for what is missing
The most misleading CMAs are the ones with omissions. If a nearby sale that closed low is absent, ask why. If every comp happens to support an unusually high number, ask what was excluded.
When we prepare a CMA we include the comparables that argue against our number as well as the ones that support it. A seller who only hears the flattering half cannot make a good decision.
Understand the adjustments
Adjustments are where judgement enters - so much for a pool, so much for an extra bathroom, so much for a busy road. Reasonable people differ, but the reasoning should be visible and consistent. If you cannot follow how a figure was reached, that is worth asking about.
Then apply the market
A CMA describes what has already happened. Whether you should price at, above, or below it depends on current inventory, how quickly homes are moving, and your own timeline. The analysis informs the decision; it does not make it.
