New York State Real Estate Salesperson Licensing Exam

Which of the following is not considered a Comparative Market Analysis (CMA)?

1. Property tax assessment

2. An appraisal

3. Market comparison report

4. Neighborhood sales analysis

The correct answer is: An appraisal

The rationale for identifying an appraisal as not considered a Comparative Market Analysis (CMA) lies in the fundamental differences between the two. A Comparative Market Analysis is generally conducted by real estate professionals to estimate the value of a property based on recent sales of similar properties in the area. This approach takes into account factors such as location, property features, and market conditions to provide a quick and accessible valuation for sellers or buyers. In contrast, an appraisal is a more formal valuation process typically performed by a licensed appraiser. It involves a comprehensive and methodical evaluation that adheres to specific standards and guidelines. An appraisal not only includes comparable sales data but also examines the property’s condition, physical attributes, and market trends, often resulting in a more in-depth and legally defensible value estimation. While property tax assessments, market comparison reports, and neighborhood sales analyses can all contribute data or comparative insights used in real estate transactions, they do not meet the formal standards of what constitutes a CMA as defined by real estate practitioners. Thus, distinguishing these elements is crucial for understanding their applications in the real estate market.