What is a comparative market analysis?

A comparative market analysis (CMA) is an informal estimate based on sales of similar properties, which is precisely why the selected answer is the most accurate. It involves evaluating recently sold properties that are comparable in location, size, and features to the property in question. Real estate professionals use CMAs as a tool to help sellers price their homes appropriately in the current market and to assist buyers in understanding the value of a property relative to others in the area.

This informal estimate differs from an official document required for closing, which typically includes legal paperwork and disclosures necessary to finalize a real estate transaction. Additionally, a CMA is not a detailed appraisal performed by a licensed appraiser, which involves a more formal process with more extensive evaluation methods and is often legally binding. Finally, while a CMA might consider market trends, it primarily focuses on specific comparable properties to derive value rather than being a general report on market trends itself.