Humber/Ontario Real Estate Course 4 Exam Practice

What does a comparative market analysis do when presented to a seller?

1. Compares the seller's property with other similar properties in the marketplace.

2. Can be used as a replacement for a formal appraisal.

3. Is a factual analysis limited to properties in the immediate area.

4. Is mandatory to sign by all respondents viewing the property.

5. Must be signed by the registrant making the presentation.

6. Provides an accurate market value for the property.

The correct answer is: Compares the seller's property with other similar properties in the marketplace.

A comparative market analysis (CMA) serves as a vital tool for sellers in understanding their property's position in the marketplace. By comparing the seller’s property with similar properties that have recently sold, are currently for sale, or were on the market but did not sell, the CMA helps to establish a pricing strategy grounded in current market conditions. This analysis focuses on key attributes such as location, size, condition, and features, providing sellers with informed insights into how their property stands relative to others. This process facilitates a realistic and competitive pricing approach, ultimately aiding in the sale of the property. While a CMA provides valuable market insights, it is not a formal appraisal and does not require mandatory signatures or limit itself strictly to the immediate area. Additionally, it does not provide a definitive market value, but rather an estimation based on market data.