Humber/Ontario Real Estate Course 3 Exam Practice

What is a comparative market analysis (CMA) useful for?

1. Is commonly used by appraisers to estimate the market value of a property.

2. Can be helpful for a seller evaluating any offers received.

3. Must include an estimate of selling costs and net proceeds, according to the REBBA Code of Ethics.

4. Is also commonly referred to as a 'narrative report' or a 'form report.'

5. Is required by law before listing a property.

6. Is typically used to determine rental rates for investment properties.

The correct answer is: Can be helpful for a seller evaluating any offers received.

A comparative market analysis (CMA) is particularly useful for a seller evaluating any offers received because it provides a comprehensive review of recent sales and current listings of similar properties in the area. This analysis helps sellers understand how their property compares in terms of pricing and features, which allows them to make informed decisions when assessing the offers they receive. The CMA helps sellers identify whether the offers are competitive, fair, or perhaps below market value based on the current market conditions and the attributes of their home. It includes data such as the sale price of comparable listings, which sheds light on what buyers are willing to pay in the current market. While the other choices touch on various aspects of property evaluation or reporting, they do not specifically highlight the CMA's direct utility in the context of evaluating offers, making the first option less relevant to this particular question. The requirement of including selling costs and net proceeds, often mentioned in the context of listing presentations, does not usually fall within the standard scope of a CMA; hence it diverges from the primary purpose. Additionally, while the terms 'narrative report' or 'form report' may describe types of property reports, they don’t accurately capture the essence of a CMA. The legal implications around requiring a CMA and