Humber/Ontario Real Estate Course 3 Exam Practice

Which document helps a market participant to estimate property value based on recent sales?

1. Comparative Market Analysis (CMA)

2. Home Inspection Report

3. Market Conditions Advisory

4. Property Assessment Report

5. Real Estate Appraisal Report

6. Title Search Certificate

The correct answer is: Comparative Market Analysis (CMA)

The Comparative Market Analysis (CMA) is an essential tool used by real estate professionals to estimate a property's value based on recent sales of similar properties in the same area. It typically includes data on recently sold properties, current listings, and properties that were on the market but did not sell. By analyzing this information, a CMA provides insights into current market trends and helps in determining a competitive price for a property. The importance of a CMA lies in its ability to reflect the market dynamics as it draws on up-to-date sales information specific to the neighborhood or area in question, making it a reliable resource for valuing real estate. It serves both buyers and sellers, offering an informed basis for negotiations and pricing strategies. Other documents like a Home Inspection Report focus primarily on the condition of a property and may not directly relate to market value. A Market Conditions Advisory provides broader market information but does not specifically analyze comparable sales. A Property Assessment Report is often used for taxation purposes rather than current market value. A Real Estate Appraisal Report provides a professional assessment of value but does so in a more formal setting, usually required for financing. A Title Search Certificate pertains to ownership history and encumbrances and does not address property value.