What is the primary purpose of a competitive market analysis?

The primary purpose of a competitive market analysis, often referred to as a CMA, is to estimate the market value of a property based on recent sales data of comparable properties in the area. This involves analyzing various factors such as the sale prices of similar homes, property characteristics, and market trends to derive an accurate value for the property in question.

By focusing on recent sales, a CMA provides a realistic perspective on what buyers are willing to pay in the current market, thus enabling sellers to set competitive prices or helping buyers in their negotiating strategies. Understanding these dynamics is crucial for making informed real estate decisions, whether for buying or selling.

While establishing legal boundaries is important for property ownership, and determining the highest and best use or assessing investment risks are valuable considerations in real estate, they do not reflect the primary focus of a competitive market analysis, which is specifically geared toward valuation based on market activity.