Florida Broker Practice Exam

What analysis helps determine a selling price for a seller or an appropriate offer for a buyer based on real estate activity?

1. Property Value Assessment

2. Comparative Market Analysis

3. Market Trend Analysis

4. Real Estate Appraisal Report

The correct answer is: Comparative Market Analysis

The correct choice, Comparative Market Analysis (CMA), is a critical tool used by real estate professionals to estimate the value of a property in the current market. A CMA involves studying recently sold properties that are similar in characteristics to the subject property, such as size, location, age, and amenities. By analyzing these comparable sales, real estate agents can derive an accurate selling price that reflects current market conditions and the property's features. Conducting a CMA allows sellers to set a competitive asking price, maximizing their chances of selling quickly and within a desirable price range. For buyers, a CMA assists in determining what constitutes a reasonable offer when negotiating for a property, ensuring they do not overpay relative to the prevailing market conditions. The CMA also accounts for variations in the market and helps assess how factors like location and property condition might affect the price. In contrast, a property value assessment typically refers to a broader or more generalized process not always tailored to current market activity; it may not consider recent sales data as closely. Market trend analysis involves studying general trends within the real estate market over time but does not directly provide a price for a specific property. A real estate appraisal report is a formal assessment conducted by a licensed appraiser, which offers an official valuation but is