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

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.

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.

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14 comments · newest first

Rosendo 10 months ago

D is the best answer here, no doubt!

Yolande 10 months ago

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

Pauline 10 months ago

D is definitely true! Both buyers and sellers benefit.

Man 10 months ago

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

Nelida 10 months ago

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

Mattie 11 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.

Sheron 11 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.

Lenna 11 months ago

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

Hermila 11 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.

Delmy 12 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.

Sabina 12 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.

Altha 12 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.

Asha 1 year 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.

Casandra 1 year 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.

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