Selecting and Adjusting Comparable Sales
A Comparative Market Analysis (CMA) estimates a property's fair market value by analyzing recent sales of similar properties in the same market area. The subject property is what you are valuing; comparable sales (comps) are the evidence. Comp selection criteria, in order of priority: location (same neighborhood, or adjustments required for location differences); recent sale date (within 6 months is ideal; 12 months maximum in a stable market; in a rapidly changing market, use 3 months and note the trend direction); size (within 10–15% of subject's square footage); condition and age (similar construction vintage and condition); and features (bedroom/bathroom count, garage, pool, lot size). Once three to five comps are selected, each must be adjusted to match the subject property. Adjustments are dollar amounts added to or subtracted from the comp's sale price to account for differences from the subject. If the subject has a two-car garage and Comp A has none, you add the garage value to Comp A's price (because Comp A sold for less than it would have with a garage). Adjustment direction rule: if the comp is inferior to the subject in a feature, add to the comp; if the comp is superior, subtract from the comp. You are always adjusting the comp toward what it would have sold for if it were identical to the subject. Adjustment amounts are derived from paired sales analysis — finding two nearly identical sales that differ in only one feature and isolating the price difference to quantify that feature's market value.