Comparative Market Analysis (CMA)

Definition

A valuation method comparing a property to similar recent sales in the area, also known as 'pretending your house is worth what you want it to be.'

Example Usage

The CMA shows similar homes in the neighborhood sold for $450,000-$475,000.

Origin

Real estate valuation methodology developed in the 20th century

Fun Fact

CMAs are more flexible than appraisals but less legally binding, making them popular with optimistic sellers.

Source: Real Estate Valuation Methods

Related Terms

Intermediate

break-even point

The moment when your total homeownership costs equal what you would have spent renting, making your purchase financially justified. It's the mathematical validation you desperately need after signing that mortgage.

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concessions

Money or perks the seller agrees to provide the buyer at closing, typically covering closing costs or repairs. It's the real estate equivalent of throwing in floor mats when buying a car.

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Advanced

downzoning

The legislative process of changing zoning to allow less intensive land use, such as reducing permitted building height or density. It's how existing homeowners pull up the ladder behind them to prevent the neighborhood from changing.

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cadastral map

A comprehensive, scale-accurate map showing property boundaries, ownership parcels, and sometimes tax assessments for an entire jurisdiction. Think of it as the government's meticulous diagram of who owns every square inch of land.

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construction loan

Short-term financing for building or renovating property, typically disbursed in stages as construction progresses rather than all at once. It's banking's trust exercise, betting you can actually finish the project before the money runs out.

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Advanced

seller carry-back

When the seller provides financing to the buyer instead of requiring a traditional mortgage, essentially becoming the bank. It's either a creative solution or a sign someone couldn't qualify for actual financing.

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