Maryland Home Improvement PSI Practice Exam

What type of properties should a broker look for when compiling a competitive market analysis?

1. Properties that were sold for all cash.

2. Properties that had been extensively advertised.

3. Properties that were offered by owner with no broker.

4. Properties that were located near the property being listed.

The correct answer is: Properties that were located near the property being listed.

When compiling a competitive market analysis (CMA), a broker should focus on properties that are located near the property being listed. This is essential because proximity plays a crucial role in determining market value. Properties in the same neighborhood or a similar area are likely to have similar features, such as schools, amenities, and overall market conditions, which can significantly impact their sale prices. Using local comparable properties helps the broker establish a more accurate price point for the property in question. Buyers frequently consider the surrounding area when assessing a home's value, making local sales the most relevant data points in a CMA. Additionally, while there may be some value in looking at all-cash sales, extensively advertised properties, or listings sold by owners without brokers, these factors are less directly tied to the competitive dynamics of similar properties in the vicinity. Local market conditions, specifically in terms of location, are the primary indicators of property value and potential interest from buyers.