What role does a CMA (Comparative Market Analysis) play in real estate transactions?

A Comparative Market Analysis (CMA) is a vital tool in real estate transactions as it assesses competitive pricing. By analyzing recent sales of similar properties in the same area — including factors like size, condition, and location — a CMA provides a well-informed estimate of a property's value. This analysis helps sellers set a competitive price to attract buyers and assists buyers in determining whether a property is fairly priced. Establishing the right price is crucial for a successful transaction, as it influences how long a property stays on the market and whether it sells at all.

In contrast, the other options do not align with the primary function of a CMA. While it may indirectly affect understanding of seller expenses, it does not directly determine these costs. A CMA cannot guarantee loan approval for buyers, as loan decisions involve various other factors not assessed through a CMA. Additionally, a CMA does not lock buyers into a contract; that is a separate aspect of the purchase process dependent on agreements between the buyer and seller. Thus, the primary focus of a CMA is indeed on competitive pricing in the real estate market.