Which statement is TRUE about a comparative market analysis (CMA)?

A comparative market analysis (CMA) serves as a tool for real estate professionals to determine the value of a property by examining similar properties in the area, known as comparables. The true aspect of this tool lies in its distinction from a formal property appraisal.

While a CMA is constructed using recent sales data, market conditions, and relevant characteristics of similar properties, it does not carry the same weight or formalization as an appraisal conducted by a licensed appraiser. Appraisals involve rigorous methods and are often required by lenders for financing purposes, whereas a CMA is primarily used for helping sellers and buyers make informed decisions in a real estate transaction.

This distinction is crucial for understanding the nature of a CMA within the real estate industry, highlighting the importance of its use as a strategic guide rather than a definitive valuation like an appraisal.