Real Estate License Comparable-market Analysis (CMA)
Last updated: May 2, 2026
Comparable-market Analysis (CMA) questions are one of the highest-leverage areas to study for the Real Estate License. This guide breaks down the rule, the elements you need to recognize, the named traps that catch most students, and a memory aid that scales to test day. Read it once, then practice the same sub-topic adaptively in the app.
The rule
A Comparable Market Analysis is a licensee's opinion of a likely sale price for a subject property, derived by comparing it to recently sold, similar properties in the same market and adjusting for differences. The CMA uses the sales comparison approach: adjust the COMP toward the SUBJECT — add to the comp's sale price for features the subject has that the comp lacks, subtract for features the comp has that the subject lacks. A CMA is NOT a USPAP appraisal and a licensee may not call it one; it is a marketing tool for listing or offer decisions. Reliable CMAs use 3–5 closed sales within the past 3–6 months, within roughly one mile, and similar in size, age, style, and condition.
Elements breakdown
Subject Property Profile
The detailed description of the property being valued, used as the baseline for comparison.
- GLA in square feet
- bedroom and bathroom count
- lot size and zoning
- age and condition rating
- garage, basement, and major features
Comparable Selection Criteria
Standards a sold property must meet before it qualifies as a comp.
- closed sale, not pending or active
- sold within last 3-6 months
- within ~1 mile or same submarket
- similar style, size, age, and quality
- arm's-length transaction with no duress
Adjustment Direction Rule
The mechanical convention for which way to push the comp's price.
- adjust the comp, never the subject
- comp inferior to subject: add to comp price
- comp superior to subject: subtract from comp price
- apply paired-sales analysis where possible
- express adjustments in dollars, not percent of list
Common Adjustment Categories
The features routinely adjusted between comp and subject.
- financing concessions and seller credits
- date of sale (market conditions)
- location within neighborhood
- site size and view
- GLA, room count, and bath count
- age, condition, and updates
- garage, basement, pool, and outbuildings
Reconciliation
Selecting a final value indication from the range of adjusted comp prices.
- weight comps with fewest and smallest adjustments
- do not simply average all comps
- note gross and net adjustment percentages
- support the price with the most similar comp
- produce a value range, not a single number
CMA vs Appraisal Boundary
What a licensee may and may not represent the CMA to be.
- may state opinion of likely sale price
- may not call the CMA an appraisal
- may not sign as a USPAP-compliant report
- must disclose if compensation depends on value
- cannot substitute for lender-required appraisal
Common patterns and traps
Wrong-Direction Adjustment
The classic CMA trap. The exam shows a comp that is superior to the subject (extra bath, larger lot, pool) and asks how to handle it. The wrong answers add to the comp's price or, worse, adjust the subject's price downward. The rule is mechanical: when the comp has a feature the subject lacks, you SUBTRACT from the comp because the comp would have sold for less without that feature.
A choice that says 'add $X to the comp because it has the pool' or 'subtract $X from the subject because the comp has the pool.'
CMA-as-Appraisal Confusion
Tests whether you know the regulatory line between a licensee's opinion of value and a USPAP appraisal. Wrong answers let the licensee call the CMA an appraisal, sign it as such, or substitute it for a lender-ordered appraisal. License law in every jurisdiction prohibits a non-appraiser from issuing what looks like an appraisal, especially for a fee tied to value.
A choice that says the licensee 'may provide the CMA to the lender in lieu of an appraisal' or 'should sign the CMA as a Restricted Appraisal Report.'
Stale or Distant Comp
The exam tempts you with a comp that is a perfect physical match but is two years old, in a different school district, or three miles away across a highway. Recency and location dominate physical similarity in volatile markets. A two-year-old comp needs a market-conditions adjustment so large that other, more recent comps are almost always preferable.
A choice that picks the 'most physically identical' comp from 18 months ago over a similar comp from 60 days ago.
Average-the-Comps Shortcut
Wrong answers that simply average the three adjusted prices and call that the value. Reconciliation is judgment, not arithmetic. The comp that required the fewest and smallest adjustments deserves the most weight; a straight average dilutes the best comp with weaker ones.
A choice that computes the arithmetic mean of three adjusted prices and reports that as the CMA value.
Concession-Blind Comp
A comp closed at a high price only because the seller paid $15,000 in buyer closing costs or threw in a car. The headline price overstates what the property would fetch in a clean transaction. The CMA must adjust the comp DOWN for seller concessions or it imports the inflation directly into the subject's opinion of value.
A choice that uses the comp's gross sale price without adjusting for documented seller-paid concessions.
How it works
Picture a 1,950 sq ft three-bed, two-bath ranch on a 0.25-acre lot in good condition. You pull three closed sales: Comp 1 sold for $410,000 but has only two baths, Comp 2 sold for $432,000 with a finished basement the subject lacks, and Comp 3 sold for $418,000 and is nearly identical except it sits on a busier street. You adjust Comp 1 UP for the missing bath (say +$8,000), adjust Comp 2 DOWN for its superior basement (say -$12,000), and adjust Comp 3 UP for its inferior location (say +$5,000). Adjusted indications come in at $418,000, $420,000, and $423,000. You weight Comp 3 most heavily because it required the fewest and smallest adjustments and conclude a probable sale range of $418,000–$423,000. The takeaway: every adjustment moves the comp, the subject's number stays put, and the comp that needed least surgery anchors your opinion.
Worked examples
How should you treat the garage difference when adjusting the Birchwood Lane comp?
- A Add $9,000 to Birchwood Lane's $389,000 sale price. ✓ Correct
- B Subtract $9,000 from Birchwood Lane's $389,000 sale price.
- C Subtract $9,000 from the subject property's indicated value.
- D Make no adjustment because the GLA is essentially the same.
Why A is correct: The comp is INFERIOR to the subject in garage (one-car detached vs two-car attached). Adjustments are made to the comp, and when the comp lacks a feature the subject has, you ADD to the comp's price — the comp would have sold for about $9,000 more if it had the subject's garage. The mnemonic is CIA: Comp Inferior, Add.
Why each wrong choice fails:
- B: Subtracting would be correct only if the comp were SUPERIOR to the subject. Here the comp's garage is inferior, so subtracting moves the indication the wrong way. (Wrong-Direction Adjustment)
- C: Adjustments are never made to the subject property. The subject's profile is fixed; you adjust the comps toward the subject. Touching the subject's number is the cardinal procedural error in a CMA. (Wrong-Direction Adjustment)
- D: GLA similarity does not erase a documented $9,000 paired-sales difference for the garage. Adjustments are made for every meaningful feature difference, not only square footage.
Which response is consistent with license law and the CMA-vs-appraisal boundary?
- A The salesperson may sign and submit the CMA to the lender as a Restricted Appraisal Report to rebut the appraisal.
- B The salesperson may relabel the CMA as an 'appraisal' since the methodology is similar to the sales comparison approach.
- C The salesperson may give the CMA to the homeowner as an opinion of value, clearly stating it is not an appraisal and was not prepared under USPAP. ✓ Correct
- D The salesperson may charge a fee equal to 1% of the value reached in the CMA for preparing the document.
Why C is correct: A licensee who is not a certified or licensed appraiser may prepare a CMA as an opinion of value for marketing or client guidance, but must clearly disclose that it is not an appraisal and was not prepared under USPAP. The CMA cannot substitute for a lender-ordered appraisal and cannot be signed as any USPAP report.
Why each wrong choice fails:
- A: Only a licensed or certified appraiser may issue a USPAP report, including a Restricted Appraisal Report. A salesperson signing one would violate both license law and USPAP. (CMA-as-Appraisal Confusion)
- B: Methodology overlap does not authorize the relabeling. The line is drawn by who prepared the document and under what standards, not by which approach to value was used. (CMA-as-Appraisal Confusion)
- D: Charging a fee tied to the value reached creates a contingent-fee conflict prohibited for valuation work and signals an appraisal-like service the licensee is not authorized to perform. (CMA-as-Appraisal Confusion)
Which approach to reconciliation is most defensible?
- A Take the arithmetic average of $402,000, $405,000, and $399,000 and report $402,000.
- B Weight Comp 1 most heavily because it required the smallest net adjustments and report a value near $402,000, supported by Comp 3. ✓ Correct
- C Choose Comp 2 because its pool and basement make it the most luxurious and best reflects the subject's potential.
- D Report the highest indication, $405,000, to give the seller the strongest pricing position.
Why B is correct: Reconciliation weights comps by similarity to the subject, measured by the size of adjustments needed. Comp 1 required only $4,000 in net adjustments, so it most closely resembles the subject and deserves the most weight; Comp 3 supports it. Comp 2's heavy adjustments make it the weakest indicator despite its higher price.
Why each wrong choice fails:
- A: A straight average dilutes the strongest comp with weaker ones. Reconciliation is a judgment process, not an arithmetic mean of all three indications. (Average-the-Comps Shortcut)
- C: Picking the comp with the most superior features inverts the logic. Heavy adjustments mean the comp is least like the subject, so it should be weighted least, not most.
- D: Selecting the highest number to favor the seller is advocacy, not valuation. A CMA must reflect a defensible market indication, and steering the conclusion toward a desired price violates the duty of competent, honest representation.
Memory aid
CIA: Comp Inferior, Add. Comp superior, subtract. Always move the COMP, never the subject.
Key distinction
A CMA is a licensee's marketing opinion of value using closed sales; an appraisal is a USPAP-compliant report by a licensed or certified appraiser, often required by the lender — the two are not interchangeable, and a licensee who blurs the line invites a license-law violation.
Summary
Pick recent, nearby, similar closed sales; adjust the comp toward the subject (add for inferior, subtract for superior); weight the closest comp; and never call the result an appraisal.
Practice comparable-market analysis (cma) adaptively
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Start your free 7-day trialFrequently asked questions
What is comparable-market analysis (cma) on the Real Estate License?
A Comparable Market Analysis is a licensee's opinion of a likely sale price for a subject property, derived by comparing it to recently sold, similar properties in the same market and adjusting for differences. The CMA uses the sales comparison approach: adjust the COMP toward the SUBJECT — add to the comp's sale price for features the subject has that the comp lacks, subtract for features the comp has that the subject lacks. A CMA is NOT a USPAP appraisal and a licensee may not call it one; it is a marketing tool for listing or offer decisions. Reliable CMAs use 3–5 closed sales within the past 3–6 months, within roughly one mile, and similar in size, age, style, and condition.
How do I practice comparable-market analysis (cma) questions?
The fastest way to improve on comparable-market analysis (cma) is targeted, adaptive practice — working questions that focus on your specific weak spots within this sub-topic, getting immediate feedback, and revisiting items you missed on a spaced-repetition schedule. Neureto's adaptive engine does this automatically across the Real Estate License; start a free 7-day trial to see your sub-topic mastery climb in real time.
What's the most important distinction to remember for comparable-market analysis (cma)?
A CMA is a licensee's marketing opinion of value using closed sales; an appraisal is a USPAP-compliant report by a licensed or certified appraiser, often required by the lender — the two are not interchangeable, and a licensee who blurs the line invites a license-law violation.
Is there a memory aid for comparable-market analysis (cma) questions?
CIA: Comp Inferior, Add. Comp superior, subtract. Always move the COMP, never the subject.
What's a common trap on comparable-market analysis (cma) questions?
Adjusting the subject instead of the comp
What's a common trap on comparable-market analysis (cma) questions?
Calling the CMA an appraisal or quoting USPAP
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