Colibri Real Estate 30-Hour Alabama Post License Practice Exam

What is the final step in preparing a Comparative Market Analysis (CMA)?

1. Gathering data

2. Estimating a reasonable selling price

3. Analyzing market trends

4. Listing properties

The correct answer is: Estimating a reasonable selling price

Estimating a reasonable selling price is the final step in preparing a Comparative Market Analysis (CMA) because it synthesizes all the information gathered throughout the analysis process. A CMA involves several preliminary steps, including gathering data about similar recent sales and current listings, as well as analyzing market trends to understand the local real estate environment. Once all relevant data on comparable properties—often referred to as "comps"—is collected and trends in the market are evaluated, the next logical step is to estimate a selling price. This estimation should take into consideration all aspects of the data collected, including the characteristics of the subject property compared to the comps, market absorption rates, and any adjustments that need to be made for differences in property features or conditions. By carefully weighing this information, the real estate professional can arrive at a price that is both competitive and reflective of the property's market value. Therefore, estimating a reasonable selling price is not just an arbitrary figure; it is the culmination of a comprehensive evaluation of the gathered data and market dynamics, and this step is critical for effective pricing strategy in real estate.