A Comparative Market Analysis, or CMA (also referred to as "comps"), is a report detailing similar properties that have recently sold within the neighborhood. The CMA cites the prices that these properties were sold for, thereby providing basis for comparison for the property that the buyer is interested in, or that the seller is putting up on the market. The CMA should also include the price list of similar properties currently for sale within the area.
The CMA is drawn up and submitted by the real estate agent to the buyer or seller. Using this information, the buyer should be able to tell whether he's paying a fair price for the property, or how much his offer should be. Likewise, the CMA will provide the seller an idea of how much to sell his property for.
Properties deemed similar are determined or compared by their square footage; the age of their construction; their amenities, upgrades, and current condition; and their location within the neighborhood.
Aside from pending and sold properties, the CMA contains pending sales, which are listings that are formerly active and now under contract. Off-market properties may also be included. These properties have been withdrawn from the market, or have had their sale canceled, often because the seller had priced the property too steeply. Likewise, expired listings, or properties that were too expensive and did not sell, may be cited within the report.
CMAs are crucial to any real estate transaction. As an agent -- and, likewise, as a buyer or seller -- rank it as within your first order of business in your client-agent relationship.