Humber/Ontario Real Estate Course 2 Exam Practice

What does a comparative market analysis (CMA) offer to a seller?

1. A CMA compares the seller's property with other similar properties in the marketplace

2. A CMA can replace a formal appraisal

3. A CMA is used to determine property taxes

4. A CMA must be conducted by a licensed appraiser

5. A CMA is limited to properties outside the immediate area

6. A CMA includes an inspection report

The correct answer is: A CMA compares the seller's property with other similar properties in the marketplace

A comparative market analysis (CMA) offers to a seller the ability to compare their property with other similar properties in the marketplace. This is essential for sellers as it helps them understand the current market conditions, set a competitive price for their property, and make informed decisions when listing their home for sale. By analyzing recent sales of comparable properties in the area, a CMA provides valuable insights into the value of the seller's property and helps them determine a realistic listing price. Option B is incorrect as a CMA cannot replace a formal appraisal, which is a more in-depth and detailed assessment conducted by a licensed appraiser. Option C is incorrect as a CMA is not used to determine property taxes; property taxes are usually determined by the local government based on assessed property values. Option D is also incorrect as a CMA does not have to be conducted by a licensed appraiser; it can be prepared by a real estate agent or broker. Option E is incorrect as a CMA typically focuses on properties within the same or similar area as the subject property, not just limited to properties outside the immediate area. Option F is incorrect as a CMA does not include an inspection report; it primarily focuses on market analysis and comparable property sales data.