Maryland Home Improvement PSI Practice Exam

A competitive market analysis primarily considers what factor?

1. Square footage of the subject property.

2. Neighborhood nuisances.

3. Unemployment levels in the community.

4. Age of the sellers.

The correct answer is: Square footage of the subject property.

A competitive market analysis (CMA) primarily focuses on determining the value of a property by evaluating comparable properties, often referred to as "comps." One of the crucial factors in this assessment is the square footage of the subject property. Square footage provides a quantitative measure that allows for an objective comparison between properties within the same market. The size of a property significantly influences its market demand and pricing. In a CMA, the analyst will compare the square footage of similar homes that have recently sold, are currently on the market, or have been taken off the market to assess how much buyers are willing to pay for a property of a certain size. Other options, while relevant to some aspects of real estate appraisal or market conditions, do not play as central a role in the direct valuation of a property in a CMA as the square footage does. For instance, neighborhood nuisances may affect desirability but are subjective and harder to quantify; unemployment levels can indicate overall market health but are not specific to individual property valuation; and the age of sellers is generally not related to property value and does not impact the analysis itself.