Certified Residential Appraiser Practice Exam

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Study for the Certified Residential Appraiser Exam. Use flashcards and multiple choice questions with hints and explanations. Ensure you're ready for your certification!

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What is a Comparative Market Analysis (CMA) considered when completed by a real estate broker?

A marketing strategy
A legal report
A valuation service
A financial audit

The correct answer is: A valuation service

A Comparative Market Analysis (CMA) conducted by a real estate broker is considered a valuation service because it involves assessing the values of similar properties in the market to determine a reasonable value for a specific property. The broker analyzes recent sales, active listings, and pending transactions of comparable properties to arrive at a market-driven estimate, assisting clients in making informed decisions regarding buying, selling, or pricing their property. While a CMA serves multiple functions and may support marketing strategies, it fundamentally aims to establish a value based on current market conditions. This process is essential in real estate transactions, as it helps ensure that properties are priced competitively and accurately, reflecting market trends. In contrast, a CMA is not a legal report, which would involve more formal documentation that addresses legal aspects of property ownership, nor is it a financial audit, which pertains to financial records and compliance. Additionally, while the insights from a CMA can inform marketing strategies, its primary purpose remains focused on valuation within the real estate market.