Property ValuationIntermediateCalifornia Exam

What is the purpose of a Comparative Market Analysis (CMA) as used by real estate agents?

ATo provide a certified appraisal for mortgage lending, consistent with USPAP appraisal standards

BTo help sellers determine an appropriate listing price and help buyers evaluate offers using recent comparable salesCorrect

CTo assess property taxes for the county assessor, per standard California valuation practice

DTo calculate insurance replacement cost for the property owner, under standard appraisal methodology

Why To help sellers determine an appropriate listing price and help buyers evaluate offers using recent comparable sales Is Correct

Answer B: To help sellers determine an appropriate listing price and help buyers evaluate offers using recent comparable sales

A CMA is prepared by a real estate agent (not a licensed appraiser) to help clients price a property for sale or evaluate an offer. It analyzes recent comparable sales, active listings, and expired listings.

Exam Tip: Property Valuation

Valuation questions focus on the three approaches to value: sales comparison, cost, and income. Know which approach is best for which property type. The income approach uses cap rate and NOI — memorize these formulas.

Key Property Valuation Terms in This Question

Appraisal

A professional estimate of a property's market value prepared by a licensed or certified appraiser.

Lien

A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.

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Key Terms to Know

Appraisal

A professional estimate of a property's market value prepared by a licensed or certified appraiser.

Comparable Sales (Comps)

Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.

Lien

A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.

Listing Agreement

A contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.

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