Washington State Real Estate Practice Exam

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What is the purpose of a Comparative Market Analysis (CMA)?

To negotiate better prices for buyers
To estimate property value based on recent sales
To provide a legal assessment of property conditions
To establish marketing strategies for real estate

The correct answer is: To estimate property value based on recent sales

The purpose of a Comparative Market Analysis (CMA) revolves around estimating property values based on recent sales of similar properties in the same area. This method provides real estate professionals with a detailed understanding of current market conditions, influences buyer and seller pricing strategies, and helps in determining a fair market value for a home. A CMA typically analyzes various factors such as the sale prices of comparable properties, market trends, and location specifics to deliver a well-rounded estimate of what a particular property is worth at that time. This analysis is integral for both buyers, who need to understand if a property is fairly priced, and sellers, who want to set an appropriate listing price that aligns with market expectations. While negotiating better prices and establishing marketing strategies can be influenced by the findings of a CMA, those are not the primary purposes of this tool. Additionally, a legal assessment of property conditions pertains more to property inspections and disclosures rather than the valuation aspect that a CMA focuses on.