What does the term "comparative market analysis" refer to?

The term "comparative market analysis" refers to a method used to assess property values against similar sales. This process involves evaluating properties that are comparable in terms of location, size, features, and selling price to determine a fair market value for the property in question.

This analysis is critical for real estate professionals as it aids in setting competitive prices for listings and helps buyers identify fair offers for properties they are interested in. By looking at recent sales data for similar properties in the same area, real estate agents can provide clients with informed insights into market trends and assist in making educated pricing decisions.

While a rental potential report focuses specifically on how much income a property could generate, and a breakdown of financial costs deals with the various expenses involved in a transaction, these approaches do not assess value in the same comparative sense. Additionally, reviewing legal documents pertains more to the regulatory and compliance aspects of property sales rather than assessing market value. Thus, the focus of a comparative market analysis is solely on comparing market values to ensure accurate pricing within the current real estate landscape.