A CMA is a Comparable Market Analysis. I've also seen it called Competitive Market Analysis. Regardless of how you define it, it's purpose is to give a potential seller an idea about what their home will sell for.

Many real estate agents routinely offer to do a free CMA as a way of getting their foot in the door with a potential client. And, a CMA can be a very valuable tool for the seller. But I don't believe most sellers have enough information to accurately determine if what they're looking at makes sense.

You've probably heard the quote about "lies, damned lies, and statistics".  Well, then there are CMAs.

I can get a CMA to say just about anything I want it to. But a proper CMA, while not an actual appraisal, should take into account the methods an appraiser will use when choosing which homes to use as comparisons for yours.

First of all, if you live in a good sized subdivision and there have been recent sales, that's what will be used. It doesn't matter if you think the people down the road don't have as nice a house. The rules that appraisers follow will almost guarantee that the most important comparables he or she will look at will be in the subdivision where you live.

And, they're only going to look at recent sales. In this market, if it sold more than six months ago it's insane to consider it as a guide to pricing your home. No appraiser worth their salt will use it. Prices in this market may have stabilized. But there's also a pretty good chance they're still dropping.  The more current comparables you have, the better.

The comparables used should be as close to your home as possible in terms of age, style, number of rooms, garage, lot size, etc. Think apples to apples!

And the comparables should be focused on what has sold, not what's active. It doesn't matter what someone asks for their house. It only matters what they can actually sell it for!

CMAs can be manipulated to pull the data that supports the price a seller wants. And there are plenty of agents who want or need business badly enough to tell a seller what they want to hear. That's a disservice to everyone in the long run!

So push back and ask the hard questions when you look at the numbers. If you think those numbers look too good to be true, you're probably right!