Ever had a seller insist their home is worth way more than market value? Or a buyer convinced they’re getting a deal when they’re actually overpaying? If you’ve been in real estate long enough, you’ve probably run into these situations.
The best way to handle them? A Comparative Market Analysis (CMA).
A CMA helps real estate agents, investors, and even homebuyers analyze a property’s worth by comparing it to similar properties that have recently sold. Whether you’re pricing a home for sale, making an offer, or advising an investor, a CMA is one of the most valuable tools you can use.
In this guide, we’ll cover:
- What a CMA is and why it’s essential
- A step-by-step breakdown of how to do one
- How to present your CMA professionally using Highnote
By the end, you’ll be able to confidently price homes, impress clients, and stand out as an expert in your market.
What Is a Comparative Market Analysis (CMA)?
If you’ve ever had a seller ask, “But my neighbor’s house sold for way more—why can’t I get the same price?” you already know why a Comparative Market Analysis (CMA) is essential. A CMA is how you prove your pricing strategy with real data, not wishful thinking.
Breaking It Down: What a CMA Really Is
A Comparative Market Analysis is a detailed evaluation of a home’s value based on recently sold properties that are similar in size, location, and features. It’s what real estate agents use to help sellers price their homes competitively and guide buyers in making strong offers.
A well-prepared CMA includes:
- Recently sold properties (“comps”) – Homes that have closed within the last 6 months (this could vary depending on the market, i.e., 3 months, etc.).
- Active & pending listings – Shows the current competition and most recent units in contract.
- Expired and Withdrawn listings – Homes that didn’t sell can reveal marketing or pricing mistakes.
- Market conditions – Inventory levels, days on market, and pricing trends.
Think of a CMA as your real estate truth serum—it cuts through emotion and gives clients a reality check based on facts.
CMA vs. Other Valuation Methods
Valuation Method | How It Works | Who Uses It |
Comparative Market Analysis (CMA) | Compares similar homes to determine fair market value | Real estate agents, buyers, sellers |
Appraisal | Conducted by a licensed appraiser to assess a home’s value for lenders | Banks, mortgage lenders |
Automated Valuation Model (AVM) | Uses algorithms to estimate value (e.g., Zillow Zestimate) | Consumers, investors |
A CMA is generally more accurate than an AVM because AVM algorithms may not consider factors that affect valuation not conveyed in “data” and require a human to evaluate, such as the condition of the home, views, location on the street, “curb-appeal”, style of property, and other intangible factors not reflected in data. However, unlike an appraisal, a CMA is not an official valuation for lending purposes.
I once had a seller who was convinced his home was worth $50,000 more than the comps suggested. He was comparing his outdated home to a fully remodeled one down the street. Once I showed him side-by-side CMA data—highlighting the differences in kitchen upgrades, square footage, and days on market—he finally agreed to a more realistic price. The home sold within a week, while the overpriced one sat for months!
Why a CMA Is Essential for Accurate Pricing
If you’ve ever had a listing sit on the market while competing homes fly off the shelves, chances are pricing was the problem. A well-prepared CMA helps you avoid that situation by ensuring you price homes correctly from the start.
Why Pricing Matters More Than Ever
Buyers have endless data at their fingertips. They’re checking Zillow, Redfin, and local MLS listings before they even talk to an agent. If a home is overpriced, buyers know it—and they’ll skip over it in favor of better-priced options.
A CMA helps you:
- Avoid overpricing: Overpriced homes linger on the market, leading to price cuts and lowball offers.
- Avoid underpricing: Sellers leave money on the table when they price too low.
- Justify pricing decisions: Gives sellers real data so they trust your expertise.
Help buyers make competitive offers: Buyers want to know if they’re overpaying or getting a deal.
Overpricing vs. Underpricing: The Real-World Impact
Pricing Strategy | What Happens? | Result |
Overpriced | Few showings, no offers, price drops needed. | Home sits on the market too long, buyers assume something is wrong. |
Underpriced | Multiple offers, fast sale, bidding war possible. | Better to use in hot markets where multiple offers will be expected, sellers may leave money on the table if not fully marketed at this lower price (e.g., taking the first offer without allowing other buyers to make offers for example). |
Correctly Priced (Based on CMA) | Attracts serious buyers, sells in a reasonable timeframe. | Smooth transaction, satisfied clients. |
Winning More Listings with a Strong CMA
If you’re competing for a listing, sellers want proof of why you’re recommending a certain price. The agent who comes prepared with a data-driven CMA—rather than just agreeing with the seller’s dream number—is the one who wins the listing.
A few months ago, I went up against another agent for a listing. The seller wanted $25,000 over what i thought was market value. The other agent agreed without hesitation—just to secure the listing. I, on the other hand, showed up with a detailed CMA presentation that broke down comps, market trends, and pricing strategy and I delivered it with Highnote so I can see just how long the seller was reading the CMA and how many pages. The seller didn’t like my price at first—but two weeks later, they called me back. The other agent’s listing expired because it was overpriced, and I took over the listing at the right price. It sold in 10 days.
Step-by-Step Guide: How to Do a Comparative Market Analysis
If you’ve ever walked into a listing appointment and had a seller say, “We’ll just list it higher and see what happens,” you know why having a strong CMA is essential. A well-done CMA isn’t just about running numbers—it’s about showing sellers why pricing correctly from the start is the best strategy.
Here’s how to conduct a CMA that gives you (and your clients) a clear, data-driven home value.
Step 1: Gather Property Information
Before pulling comps, you need a full picture of the home you’re analyzing. Details like square footage and bedroom count are obviously important, but smaller factors—like renovations, condition, curb appeal, the desirability of the style of home, lot size, street location, noise, and other nuisances, the appeal of the yard and gardening, location, school districts, walkability (is it flat or on a steep hill?), views from the home—all make a big difference.
Key property details to collect:
- Total square footage and lot size
- Number of bedrooms and bathrooms
- Year built and any recent renovations
- Special features (pool, finished basement, updated kitchen)
- Location, including neighborhood desirability and proximity to amenities
Many agents rely only on MLS data, but that’s a mistake. Drive by the home, talk to the seller, walk the home, and look at tax records. If the home has a brand-new kitchen or a remodeled basement, it will impact value.
Step 2: Identify Comparable Properties ("Comps")
Now it’s time to find properties that are as similar as possible to your subject home. The best comps are homes that have sold recently, ideally within the last six months.
What makes a good comp?
- Same neighborhood or within one mile in urban areas
- Similar square footage (within 10 to 20 percent of the subject home)
- Similar lot size, home style, and age
- Comparable upgrades or condition level
Avoid using active listings as comps. Just because a home is listed at a certain price doesn’t mean it will sell for that amount. If you do use active listings, you should only use them if say the home hasn’t sold in what is considered a “long period of time” (e.g., 6 months), well you can probably deduce it’s not worth the current asking price. Pending sales are slightly better (if you know what it’s in contract for), but obviously closed sales give you the most reliable pricing data.
Example: If your subject home is a 2,000-square-foot ranch built in 1995 with a renovated kitchen, your comps should also be ranch-style homes of similar size and age, with at least one comp that has a comparable kitchen update.
Step 3: Adjust for Differences
No two homes are identical, which means you need to make adjustments to your comps to reflect key differences. This is where pricing becomes more of an art than a science.
Common adjustments include:
- Adding value for extra square footage
- Adjusting for additional bathrooms or bedrooms
- Factoring in upgrades, such as a remodeled kitchen or new roof
- Accounting for location differences (homes on a cul-de-sac vs. a busy street)
For example, if a comp is 200 square feet smaller than your subject home, but everything else is similar, you should obviously adjust its price upward by perhaps taking the going $/sf in the area (dollar per square foot) and multiplying it by 200. 0 As of 2024, the median size of a new single-family home in the United States is approximately 2,286 square feet. The median price per square foot for a home is therefore $187. So taking 200 and multiplying it by 187 PSF you get $37,400 in difference solely because of 200 square feet.
Step 4: Analyze Market Conditions
Beyond individual property features, you need to assess the bigger picture. Market trends play a major role in pricing, and a home’s value in a seller’s market can be very different from its value in a buyer’s market.
Key market factors to consider:
- Are home prices rising or falling in this area?
- What are the average days on the market for similar homes?
- Are sellers receiving multiple offers or negotiating price reductions?
- How do interest rates impact affordability for buyers?
Example: If similar homes have been selling within days, and multiple offers are common, your pricing strategy might lean slightly higher. If homes are sitting on the market for months with price reductions, a more conservative approach is best.
Step 5: Determine the Home’s Value and Price Strategy
Using your adjusted comps and market data, you can now estimate a fair price range for the home. Some agents pick a single price, while others prefer a pricing range.
Three common pricing strategies:
- Market value pricing: List the home at the most realistic, data-driven price based on comps.
- Slightly below market value: Creates more interest and potential multiple offers in a competitive market.
- Slightly above market value: Gives room for negotiation, but can deter buyers if priced too high.
Some tips how to win in these situations:
- Understand that you will be up against this almost every time.
- You need to ask the seller “Out of curiosity, what are the other agents you are interviewing telling you they think the market value of the home is”? Make sure you get that information so you know what you are competing against.
- Try and be the last one to interview so you have all this information. Being the last interview also is great for
- Make sure you understand what the seller is expecting.
- If your competitor has promised a higher market value, ask yourself, can you see a situation where it could sell for that price? If so, make sure you adjust your own thinking and comps to make sure you are not “leaving money on the table”. However, if you are sure it’s not realistic and the other agent is trying to just “buy the listing”, try and tell the seller that the higher valuation is very unrealistic and you will shoot yourself in the foot if you go with that asking price. Back it up with data and explain your viewpoint that listing it too high often can get you the opposite result.
- Take the listing and use the technique of testing pricing by saying: “Let’s try the higher price, before coming to the market, e.g., telling / showing your friend agents in your brokerage first, getting their feedback, or advertising in an off-market channel first to get a reaction on pricing - because I want to get you the highest price and see what the feedback from agents and buyers are and then we can go from there. This way it’s not YOU but it’s other agents telling the seller that this price is “too high”. This is very effective for us to get the listing without “buying the listing”.
At this point, you’re ready to present your CMA to your client. But how you deliver that CMA is just as important as the data inside it.
How to Present Your CMA Using Highnote
You’ve done the work. You’ve pulled the best comps, adjusted for differences, and analyzed market trends. But now comes the critical part—presenting your CMA in a way that convinces your client to trust your pricing strategy.
Many agents still email massive PDFs or print out a thick CMA report, expecting clients to sift through pages of data. The problem? It’s difficult for your client to digest such a large set of PDFs / reports. And even if they do, they often get overwhelmed or lost in the numbers.
Conclusion & Next Steps
When done correctly, CMA positions you as the expert, helps sellers price their homes competitively, and gives buyers confidence in their offers.
Key takeaways from this guide:
- A CMA is essential for accurate pricing. It helps avoid overpricing (which leads to price reductions) and underpricing (which leaves money on the table).
- The best comps are recent, similar, and in the same market. Look for properties that match the subject home as closely as possible and adjust for differences.
- Market conditions matter. Pricing strategies should reflect whether the market is favoring buyers or sellers.
How you present a CMA is just as important as the data itself. Instead of sending overwhelming PDFs, use Highnote to deliver a sleek, professional, and trackable presentation.
What to do next:
- Start Practicing CMAs – Run a CMA for a past sale or an active listing to refine your process.
- Try Highnote for Your Next CMA – Instead of sending an attachment, upload your next CMA to Highnote and see how clients engage with it.
- Stay Ahead of Market Trends – Keep track of pricing shifts, inventory changes, and interest rate movements so your CMAs remain accurate.
The best agents aren’t just order-takers—they’re trusted advisors. A well-prepared, well-presented CMA proves your expertise, helps clients make better decisions, and ultimately leads to more successful transactions.
Now, it’s time to put this into action. Ready to take your CMAs to the next level? Try Highnote today and give your clients a CMA experience they’ll actually engage with.
