Humber/Ontario Real Estate Course 3 Exam Practice

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What role does a comparative market analysis (CMA) play in real estate?

Determines the exact value of a property.
Helps sellers evaluate offers received on their property.
Is mandatory for all property listings.
Replaces the need for an appraisal.
Used exclusively for rental properties.
Requires approval from the REBBA.

The correct answer is: Helps sellers evaluate offers received on their property.

A comparative market analysis (CMA) serves as a valuable tool that helps sellers evaluate offers received on their property. By examining recent sales of similar properties in the same area, a CMA provides insights into the market trends, pricing strategies, and the overall competitiveness of an offer. Sellers can use the information derived from the CMA to make informed decisions about whether to accept, counter, or reject an offer, ensuring that they are pricing their property competitively according to the current market conditions. While the CMA is an important resource, it does not determine the exact value of a property, as property value can be influenced by various subjective factors not captured in a CMA. It is also not mandatory for all listings, nor does it replace the need for a formal appraisal, which is often more comprehensive and legally recognized. Furthermore, a CMA is not limited to rental properties and does not require specific approval from the Real Estate and Business Brokers Act (REBBA). Instead, it is a helpful guide that supports sellers during negotiations.