Real Estate Licensing Massachusetts-Real-Estate-Salesperson Exam - Topic 5 Question 1 Discussion

Actual exam question for Real Estate Licensing's Massachusetts-Real-Estate-Salesperson exam

Question #: 1
Topic #: 5

[All Massachusetts-Real-Estate-Salesperson Questions]

Which of the following is true about a competitive market analysis?

AIt is employed for insurance purposes.

BIt is used to establish depreciable value.

CIt is usually based on local tax assessment.

DIt is useful to the buyer as well as to the seller.

Show Suggested Answer

Suggested Answer: D

Comprehensive and Detailed Explanation (150--250 words):

A competitive market analysis (CMA) is a tool prepared by real estate licensees to help sellers establish a listing price and to help buyers determine an appropriate offer. It compares recent sales of similar properties, active listings, and expired listings to estimate a property's fair market value.

A: Insurance companies use replacement cost appraisals, not CMAs.

B: Depreciable value is for tax accounting and appraisals, not CMAs.

C: Local tax assessments do not typically reflect current market value and are not the basis of a CMA.

Because it helps both sellers and buyers understand market value, the correct answer is D.

by Valentin at Oct 02, 2025, 08:29 AM

Limited Time Offer

25%

Off

Get Premium Massachusetts-Real-Estate-Salesperson Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Rosendo

4 months ago

D is the best answer here, no doubt!

upvoted 0 times

...

Yolande

4 months ago

A is incorrect; it’s not really for insurance.

upvoted 0 times

...

Pauline

4 months ago

D is definitely true! Both buyers and sellers benefit.

upvoted 0 times

...

Man

4 months ago

Wait, are we sure about B? Depreciable value? Sounds off.

upvoted 0 times

...

Nelida

4 months ago

I thought it was mostly for tax assessments, so C seems right.

upvoted 0 times

...

Mattie

5 months ago

I feel like I've seen options A and B in other contexts, but they don't seem to fit what a competitive market analysis is really about.

upvoted 0 times

...

Sheron

5 months ago

I practiced a question similar to this, and I believe that competitive market analyses help both parties, so D sounds right to me.

upvoted 0 times

...

Lenna

5 months ago

I remember something about it being related to local tax assessments, but I can't recall if that's the main purpose.

upvoted 0 times

...

Hermila

5 months ago

I think a competitive market analysis is mostly useful for buyers and sellers, so I might lean towards D, but I'm not entirely sure.

upvoted 0 times

...

Delmy

5 months ago

Ah, I remember learning about this. A competitive market analysis is all about evaluating the current market conditions and pricing for comparable properties. That's super helpful for both the buyer and the seller. I'm confident D is the right answer.

upvoted 0 times

...

Sabina

6 months ago

This seems straightforward. A competitive market analysis looks at similar properties to determine the fair market value, which is useful information for both the buyer and the seller. I'll go with D.

upvoted 0 times

...

Altha

6 months ago

I'm a little confused by this one. I'm not sure if a competitive market analysis is just for the seller or if it's useful for the buyer too. I'll have to review my notes on that.

upvoted 0 times

...

Asha

6 months ago

Okay, I know a competitive market analysis is used to assess the market value of a property, not for insurance or tax assessment. I'm pretty sure the right answer is D.

upvoted 0 times

...

Casandra

6 months ago

Hmm, I think this is asking about the purpose and use of a competitive market analysis. I'll need to think through the different options carefully.

upvoted 0 times

...