Comparative Market Analysis Calculator Formula

Understand the math behind the comparative market analysis calculator. Each variable explained with a worked example.

Use the Comparative Market Analysis Calculator

Formulas Used

Estimated Market Value

estimated_value = (adj1 + adj2 + adj3) / 3

Adjusted Comp 1

adjusted_comp1 = adj1

Adjusted Comp 2

adjusted_comp2 = adj2

Adjusted Comp 3

adjusted_comp3 = adj3

Variables

VariableDescriptionDefault
comp1_priceComp 1 Sale Price(USD)380000
comp1_adjustmentComp 1 Adjustment(%)2
comp2_priceComp 2 Sale Price(USD)395000
comp2_adjustmentComp 2 Adjustment(%)-3
comp3_priceComp 3 Sale Price(USD)410000
comp3_adjustmentComp 3 Adjustment(%)0
adj1Derived value= comp1_price * (1 + comp1_adjustment / 100)calculated
adj2Derived value= comp2_price * (1 + comp2_adjustment / 100)calculated
adj3Derived value= comp3_price * (1 + comp3_adjustment / 100)calculated

How It Works

Comparative Market Analysis

A CMA estimates a property's market value by adjusting comparable recent sales to reflect differences with the subject property.

Method

1. Select 3 recent comparable sales near the subject property 2. Adjust each comp's sale price up or down for differences (e.g., extra bedroom, older roof) 3. Average the adjusted prices for an estimated market value

Adjustments

  • Positive adjustment: the comp is inferior to the subject, so adjust up
  • Negative adjustment: the comp is superior to the subject, so adjust down

    • Worked Example

    Three comparable homes sold for $380K, $395K, and $410K with adjustments of +2%, -3%, and 0% respectively.

    comp1_price = 380000comp1_adjustment = 2comp2_price = 395000comp2_adjustment = -3comp3_price = 410000comp3_adjustment = 0
    1. 01Comp 1 adjusted: $380,000 x 1.02 = $387,600
    2. 02Comp 2 adjusted: $395,000 x 0.97 = $383,150
    3. 03Comp 3 adjusted: $410,000 x 1.00 = $410,000
    4. 04Average: ($387,600 + $383,150 + $410,000) / 3 = $393,583

    Frequently Asked Questions

    How do I choose comparable properties?

    Select homes that sold recently (within 6 months), are nearby (within 1 mile), and share similar characteristics such as size, age, bedrooms, and style.

    What types of adjustments should I make?

    Common adjustments include differences in square footage, number of bedrooms or bathrooms, lot size, garage, condition, upgrades, and any unique features.

    Is a CMA the same as an appraisal?

    No. A CMA is typically done by a real estate agent for pricing guidance. An appraisal is a formal valuation by a licensed appraiser and is required by lenders for mortgage approval.

    Ready to run the numbers?

    Open Comparative Market Analysis Calculator