Humber/Ontario Real Estate Course 2 Exam Practice

In what context is a comparative market analysis (CMA) used?

1. To provide an accurate property value for appraisal purposes.

2. To offer a directional guide in discussions about setting a listing price.

3. To make a demand notice for overdue taxes.

4. To replace a formal property inspection report.

5. To assess market conditions 24 months prior.

6. For providing a litigation report for court cases involving property disputes.

The correct answer is: To replace a formal property inspection report.

A Comparative Market Analysis (CMA) is used to offer a directional guide in discussions about setting a listing price. It is a tool commonly utilized by real estate agents to help sellers determine a competitive listing price for their property based on the current market conditions and recent comparable sales in the area. By analyzing data from similar properties that have recently sold, a CMA can help sellers and their agents make informed decisions about pricing their property to attract buyers while maximizing their potential profit. Option A is incorrect as a CMA is not used for providing an accurate property value for appraisal purposes. An appraisal is a formal valuation conducted by a certified appraiser. Option C is incorrect as a CMA is not used to make a demand notice for overdue taxes. This pertains to tax law and collection practices. Option E is incorrect as a CMA does not assess market conditions 24 months prior. It focuses on current market conditions and recent comparable sales. Option F is incorrect as a CMA is not used for providing a litigation report for court cases involving property disputes. Legal matters typically require more specialized reports and documentation.