CMA Comp Selection: Methodology That Holds Up Against an Appraiser

A CMA is not an appraisal but it should pass appraisal scrutiny. Lenders order an appraisal at contract; if the appraisal comes in below contract, the deal renegotiates or dies. CMAs built without appraisal-grade methodology produce listings that lose financing.

Comp selection criteria. (1) Geography first. Most appraisers prefer comps within a 1-mile radius for urban/suburban properties, expanding to 3-5 miles for rural. Stay within the same subdivision or neighborhood when possible—school district, HOA boundary, micro-market patterns matter more than radius.

(2) Time. Sold comps within 90 days are strongest; 91-180 days acceptable with time adjustments; over 180 days only with explicit market-trend justification. Active and pending listings inform the trajectory but don't replace sold comps.

(3) Similarity. Square footage within 15-20% of subject; same bedroom count where possible; same property type (single-family vs. condo vs. townhome). One-story vs. two-story matters in some markets (Phoenix, Arizona; Florida retiree communities).

Number of comps. Three solds minimum, five preferred. Plus two active comps (current competition), one or two pending (recent contract activity), and one expired or withdrawn (cautionary). Total of 7-10 properties in the analysis.

Adjustments. (1) Square footage: $80-200/sqft adjustment depending on market and price band. Run the adjustment per sqft of difference. (2) Lot size: $5-20/sqft of lot size difference, smaller adjustment for typical urban lots. (3) Bedrooms: $5-15K per bedroom. (4) Bathrooms: $5-12K per full bath, $3-6K per half. (5) Condition: dollar adjustments for major systems (roof, HVAC, kitchen renovation, primary bath renovation). (6) Garage: $10-25K per stall. (7) View/location premium: market-specific.

What to avoid. (1) Comp shopping—picking only comps that support your price. The appraiser will run their own analysis. (2) Ignoring expireds. Expireds at higher prices tell you the ceiling; ignoring them invites overpricing. (3) Cross-neighborhood comps for marketing convenience. The buyer's appraiser won't use them, neither should you.

Track your own CMA-to-appraisal accuracy quarterly. If your CMAs come in 3-5% above appraisal regularly, your methodology drifts. Recalibrate.