New York State Real Estate Salesperson Licensing Exam

What type of analysis compares similar properties to determine market value?

1. Market Analysis

2. Comparative Market Analysis (CMA)

3. Property Valuation

4. Investment Analysis

The correct answer is: Comparative Market Analysis (CMA)

The correct choice is Comparative Market Analysis (CMA) because it specifically focuses on evaluating similar properties, often referred to as "comparables," to derive an estimate of a property's market value. This process involves studying recently sold properties in a particular area that share similar attributes, such as location, size, amenities, and condition. By comparing these comparables, a real estate professional can determine a competitive price for the subject property based on current market trends and conditions. Market Analysis typically refers to a broader evaluation of the market as a whole and may include various factors such as economic trends, supply and demand, and demographic considerations but does not focus solely on similar properties. Property Valuation is a general term that encompasses various methods of determining a property's worth, not limited to the comparison of similar properties. It may include appraisals or income-based approaches, making it less specific to the process of comparing like properties. Investment Analysis usually pertains to assessing the viability and potential returns of a property as an investment, often considering cash flow, return on investment (ROI), and other financial metrics rather than direct comparisons with similar properties.