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Illinois exam glossary

Comparative market analysis

A good CMA does more than print three nearby sales. It tells a client where the property competes, what buyers are choosing instead, why certain sales deserve weight, and how price, condition, timing, and exposure work together. It also says plainly what the report is not: an appraisal.

Last updated: August 1, 2026

What does this exam area cover?

Short answer: A comparative market analysis is an Illinois broker or managing broker's written analysis or opinion about pricing, marketing, or financial aspects of a specified real estate interest. It can use comparable market data, broker expertise, property and transaction facts, and market conditions. A statutory CMA must state its purpose, subject interest, method, assumptions, the broker's interest, preparer identity and license, signature, and the required non-appraisal disclaimer.

Official section
National III: Valuation
Broker weight
8% of the national broker portion
Expected scored items
Valuation accounts for about 8 of 100 items

This guide follows the PSI Illinois Candidate Information Booklet effective June 24, 2026, sections 1-10 and 10-45 of the Real Estate License Act, section 5-5 of the Appraiser Licensing Act, and current broker and advertising rules checked through August 1, 2026. Illinois's technical definition also says ordinary-course brokerage activity is not considered a CMA when no separate compensation is paid beyond compensation based on the sale or rental. Because real documents and brokerage policies vary, use the statutory disclosures whenever the work is provided as a CMA.

What is on the official outline?

Topic
Define the CMA purpose
What to know
Potential listing, seller pricing, buyer offer, lessor rent, lessee negotiation, acquisition, option, lease, due diligence, lienholder use, estate planning support, marketing update, and permitted limitation
Best exam move
Write the exact intended purpose before choosing data or recommending a price.
Topic
Identify the real estate interest
What to know
Address, parcel, legal interest, fee simple, leased fee, leasehold, condominium, cooperative, land, one-to-four units, multiunit, commercial interest, partial interest, included personal property, and use rights
Best exam move
A price opinion is meaningful only when the interest and assets being compared are clear.
Topic
Identify client and relationship
What to know
Seller, buyer, landlord, tenant, prospect, client, customer, third party, agency agreement, ministerial contact, compensation, confidentiality, loyalty, material facts, conflict, and written disclosure
Best exam move
Preparing a CMA does not by itself answer whom the broker represents or which agency duties apply.
Topic
Verify subject facts
What to know
Ownership, assessor data, legal description, lot, living area, rooms, units, age, construction, quality, condition, updates, permits, zoning, taxes, association, lease, income, expenses, easements, restrictions, flood, and utilities
Best exam move
Separate verified facts, seller statements, public records, broker observations, and unresolved discrepancies.
Topic
Observe condition and presentation
What to know
Interior, exterior, deferred maintenance, updates, functional utility, curb appeal, photography, staging, repair options, as-is strategy, safety red flag, inspection referral, and access limitation
Best exam move
A broker can discuss market reaction without claiming an engineering, inspection, code, or appraisal conclusion.
Topic
Define the competitive market
What to know
Property type, buyer pool, price tier, school boundary, commute, amenities, design, age, size, condition, site, view, waterfront, association, new construction, substitute neighborhoods, and search behavior
Best exam move
Use buyer competition and property characteristics, never protected-class composition, to define the market.
Topic
Study active competition
What to know
Active listings, price changes, days on market, seller concessions, builder incentives, new inventory, condition, showing competition, listing quality, overpricing, underpricing, and buyer alternatives
Best exam move
Active listings show the choices and upper-price pressure the subject faces, not completed proof of value.
Topic
Study pending contracts
What to know
Pending status, contract secrecy, list price, market time, multiple offers, contingency, financing, anticipated closing, verification, uncertainty, and current buyer response
Best exam move
Pending listings can reveal current direction but receive cautious weight until price and terms are verified after closing.
Topic
Study closed sales
What to know
Sale price, contract date, closing date, property rights, financing, concessions, relationship, motivation, exposure, condition at sale, renovations, personal property, cash equivalence, and verification
Best exam move
Closed price is historical evidence, and its transaction conditions determine how comparable it is.
Topic
Study expired and withdrawn listings
What to know
Original price, final price, market time, condition, access, marketing, seller motivation, cancellation, relist, seasonality, feedback, and no-sale signal
Best exam move
A failed listing can reveal what the market rejected, but price may not be the only reason it failed.
Topic
Select comparable properties
What to know
Competitive substitute, proximity, recency, property rights, use, site, design, age, area, rooms, quality, condition, utility, amenities, sale terms, and data reliability
Best exam move
Choose the best market substitutes rather than the three closest addresses or highest prices.
Topic
Analyze material differences
What to know
Time, location, lot, view, area, bedroom, bathroom, garage, basement, condition, quality, renovation, accessory unit, pool, association, lease, solar, and market reaction
Best exam move
Explain only differences buyers recognize, and avoid false precision when adjustment evidence is thin.
Topic
Read supply and demand
What to know
Inventory, new listings, pendings, sales, absorption, months of supply, marketing time, price reductions, sale-to-list ratio, concessions, competing new construction, seasonality, interest rates, and segment trend
Best exam move
Use the subject's market segment because a countywide headline can hide opposite local patterns.
Topic
Develop the indicated range
What to know
Adjusted sale indications, listing competition, pending signals, data confidence, condition scenarios, as-is range, repaired range, likely sale range, exposure, negotiation, and uncertainty
Best exam move
Reconcile the strongest evidence into a supportable range before discussing list strategy.
Topic
Recommend list-price strategy
What to know
Market-entry price, search brackets, competitive position, aspirational price, auction effect, multiple-offer risk, appraisal risk, price-reduction plan, net proceeds, seller priorities, and review date
Best exam move
Distinguish the evidence-based range from the seller's chosen marketing strategy.
Topic
Support a buyer-offer strategy
What to know
List price, market range, competition, concessions, financing, appraisal contingency, inspection, escalation, personal property, closing date, earnest money, probability, and buyer limit
Best exam move
Price is only one offer term and a CMA does not determine what a buyer must pay.
Topic
State assumptions and limitations
What to know
Data date, source reliability, no title search, no survey, no inspection, unknown defects, permits, measurements, confidential pendings, changing market, repair assumption, included property, no financing guarantee, and no tax advice
Best exam move
Disclose the limits that a reasonable user needs to interpret the conclusion correctly.
Topic
Disclose broker interest
What to know
Existing ownership, contemplated purchase, listing opportunity, compensation, referral, relationship, beneficial interest, conflict, agency, informed consent, and written record
Best exam move
The CMA must disclose the broker's existing or contemplated interest in the subject real estate interest.
Topic
Include Illinois formalities
What to know
Paper or electronic writing, intended purpose, subject-interest description, methodology, assumptions, broker-interest disclosure, name, license number, signature, substantially prescribed disclaimer, and optional items
Best exam move
Treat the seven required content areas as a completion checklist, not optional boilerplate.
Topic
Update and communicate
What to know
New listing, new pending, closing, price change, market shift, condition discovery, feedback, showing activity, weekly review, revised range, version date, client instruction, accurate advertisement, and record retention
Best exam move
A CMA is a dated market snapshot, so refresh it when new evidence could change the decision.

Which distinctions produce the most mistakes?

Terms
CMA vs. appraisal
Difference
A CMA is an Illinois brokerage pricing, marketing, or financial analysis. An appraisal is a separately licensed and standards-governed value assignment.
Question cue
Broker product versus appraiser product.
Terms
CMA vs. BPO
Difference
A CMA can address broader pricing, marketing, or financial aspects. A BPO is statutorily framed as an estimate or analysis of probable selling price.
Question cue
Broader analysis versus probable selling-price opinion.
Terms
CMA vs. AVM
Difference
A CMA combines broker expertise, property facts, market context, and selected evidence. An AVM applies a mathematical model to data for an automated estimate.
Question cue
Broker judgment versus model output.
Terms
CMA range vs. list price
Difference
The range summarizes supported market evidence. List price is a marketing decision selected by the seller with strategic advice.
Question cue
Evidence conclusion versus asking strategy.
Terms
List price vs. probable sale price
Difference
List price is what the seller asks. Probable sale price estimates what the property may sell for under stated exposure, condition, and market assumptions.
Question cue
Ask versus expected transaction result.
Terms
Active listing vs. closed sale
Difference
An active listing shows current competition and seller aspiration. A closed sale records a completed transaction whose terms still need verification.
Question cue
Competition versus completed evidence.
Terms
Pending listing vs. closed sale
Difference
A pending listing signals recent buyer response but its contract price and terms may be confidential or change. A closed sale provides a completed result.
Question cue
Current but uncertain versus completed but historical.
Terms
Expired listing vs. market value
Difference
An expired listing shows that the property did not sell under its particular price, condition, access, timing, and marketing. It does not prove a single value by itself.
Question cue
Rejected offering package versus value conclusion.
Terms
Market adjustment vs. seller concession
Difference
A market adjustment explains a comparable difference. A seller concession is an economic benefit within the transaction that may affect cash equivalence.
Question cue
Analytical change versus deal term.
Terms
Client vs. CMA recipient
Difference
A client is represented by the licensee. A permitted third party can receive a CMA without automatically becoming an agency client.
Question cue
Representation versus report receipt.
Terms
Broker capacity vs. appraiser capacity
Difference
A dual licensee preparing a CMA acts and identifies as a broker. A separate appraisal assignment uses the appraiser role and applicable appraisal standards.
Question cue
State the professional hat.
Terms
Separate CMA fee vs. transaction compensation
Difference
Illinois definitions distinguish a compensated statutory CMA from ordinary-course broker activity when no separate compensation is paid beyond sale or rental compensation.
Question cue
Technical statutory product versus ordinary brokerage work.

The C-O-M-P-S market story

  1. Client, capacity, and purpose: identify the recipient, representation, real estate interest, intended decision, permitted purpose, broker interest, compensation, and required Illinois disclosures.
  2. Observe and verify: inspect or describe the property-data method, compare ownership, area, condition, permits, zoning, lease, taxes, improvements, restrictions, and other material facts across reliable sources.
  3. Market and competition: define the buyer or tenant segment, analyze active, pending, closed, expired, withdrawn, and new-construction evidence, and measure inventory, absorption, marketing time, concessions, and direction.
  4. Price the differences: choose genuine substitutes, explain or support adjustments for time, location, site, design, quality, condition, size, utility, amenities, rights, financing, and sale conditions.
  5. Strategy and range: reconcile an evidence-based range, separate list or offer strategy from the range, explain exposure and negotiation tradeoffs, state assumptions, set a review date, and update when the market moves.
Evidence
Active listings
What it says
What buyers can choose now
Main caution
Seller asking prices are not completed results
Evidence
Pending listings
What it says
What recently attracted an accepted offer
Main caution
Price and terms may be unknown or change
Evidence
Closed sales
What it says
What buyers and sellers completed
Main caution
Verify terms, condition, rights, and concessions
Evidence
Expired or withdrawn
What it says
What failed under a particular offering package
Main caution
Failure may involve more than price

How do the rules work in scenarios?

The closest sale is the wrong substitute

Scenario: The subject is a renovated three-bedroom home. The sale next door is a two-unit conversion with unresolved zoning, while a similar renovated single-family home sold one mile away.

  1. Distance is only one comparison factor.
  2. Use, legal status, layout, buyer pool, and financing differ for the two-unit conversion.
  3. The farther single-family sale competes more directly with the subject.

Answer: Give greater weight to the genuine market substitute, not the nearest address.

An active listing sets competition, not value

Scenario: A seller points to an active home listed at $650,000. It has been on the market 140 days, reduced twice, and has not received an acceptable offer. Similar closed sales range from $570,000 to $590,000.

  1. The active listing shows current seller aspiration and competition.
  2. Long exposure and price reductions show the market has not accepted the current offering.
  3. Verified closed sales provide stronger evidence of completed buyer behavior.

Answer: Do not use the $650,000 ask as proof that the subject should sell at that amount.

The concession changes the comparison

Scenario: A comparable closed at $505,000 with a $20,000 seller credit and rate buydown. The subject is expected to sell without comparable incentives.

  1. The recorded price includes economic terms that may differ from typical cash-equivalent conditions.
  2. The broker verifies the concession and how buyers reacted to similar incentives.
  3. The analysis should not treat $505,000 as automatically equivalent to a no-credit sale.

Answer: Explain and support the concession treatment before relying on the sale.

Condition creates two useful ranges

Scenario: A dated home needs flooring, paint, and kitchen work. As-is sales support $380,000 to $395,000. Renovated competition supports $445,000 to $465,000, and documented work would cost about $55,000 plus time and risk.

  1. As-is and renovated properties appeal to different buyer responses.
  2. The difference is not pure profit because renovation has cost, time, financing, holding, and execution risk.
  3. The seller can compare an as-is strategy with a supported post-improvement scenario.

Answer: Present both scenarios with costs and limitations instead of promising the renovated price.

Search brackets shape list strategy

Scenario: Supported sale evidence centers near $499,000. The seller wants to list at $510,000, while many buyer searches end at $500,000.

  1. The evidence range and asking strategy are related but different decisions.
  2. A $510,000 price may miss buyers whose portal filter ends at $500,000.
  3. The broker explains exposure, negotiation room, days-on-market risk, and a review date rather than declaring one perfect answer.

Answer: Discuss the $500,000 search threshold as a marketing tradeoff, not a legal pricing rule.

A CMA cannot replace a mortgage appraisal

Scenario: A financial institution asks an Illinois broker to prepare a CMA as the primary basis for determining market value for a new mortgage loan secured by the property.

  1. Section 10-45 expressly excludes that use from the lienholder and third-party purpose permission.
  2. The institution must determine whether an appraisal or authorized evaluation is required under the governing rules.
  3. Calling the CMA detailed or independent does not remove the statutory limit.

Answer: Decline the prohibited CMA use and route the valuation through the institution's lawful process.

A dual licensee must choose a role

Scenario: A person holds both an Illinois managing broker license and a certified residential appraiser license. The person prepares a seller CMA under section 10-45.

  1. The assignment is a brokerage CMA, not an appraisal.
  2. Rule 1450.790 requires the initial page to identify the broker capacity and broker license number.
  3. Using the appraiser credential number could blur the statutory disclaimer and professional role.

Answer: Identify and sign in the managing broker capacity for the CMA.

What are the common exam traps?

Trap
Calling a CMA an appraisal
Correction
Illinois expressly classifies a CMA as a non-appraisal brokerage product and requires a clear disclaimer.
Trap
Giving a CMA verbally only
Correction
A section 10-45 CMA must be in writing, on paper or electronically, with all required provisions.
Trap
Omitting intended purpose
Correction
Purpose controls permitted use, methodology, evidence, assumptions, and the reader's interpretation.
Trap
Describing only the building
Correction
Identify the real estate interest, rights, lease status, included assets, and other factors that define what is priced.
Trap
Choosing the three nearest sales
Correction
Select the best competitive substitutes based on use, market, rights, date, location, design, quality, condition, size, utility, and terms.
Trap
Treating list price as sale evidence
Correction
An asking price shows competition or strategy, while a closed sale shows a completed transaction.
Trap
Ignoring expired listings
Correction
Failed offerings can reveal price resistance, but verify condition, access, marketing, motivation, and withdrawal reasons.
Trap
Adjusting every feature dollar for dollar
Correction
Adjustments should reflect buyer behavior and market evidence, not cost or intuition alone.
Trap
Guaranteeing the sale price
Correction
A CMA supports a decision but cannot guarantee buyer behavior, timing, financing, appraisal, inspection, or closing.
Trap
Hiding broker interest
Correction
Disclose any existing or contemplated broker interest in the real estate interest that is the CMA subject.
Trap
Using a CMA for primary mortgage origination value
Correction
Illinois section 10-45 excludes that financial-institution purpose from authorized lienholder use.
Trap
Assuming the CMA creates agency
Correction
Determine representation from the brokerage relationship and agreements, not the report label alone.
Trap
Using confidential client facts as market data
Correction
Protect confidential information and use only data the broker may lawfully disclose and support.
Trap
Defining market by protected classes
Correction
Use property and buyer-competition evidence without discriminatory descriptions, preferences, steering, or coded demographic claims.
Trap
Letting an old CMA stand forever
Correction
Update the analysis when inventory, closings, concessions, rates, condition, or market response materially changes.

Can you answer these original practice questions?

These questions are original study items aligned to the published outline. They are not copied, recalled, or predicted PSI questions.

1. How does Illinois classify a comparative market analysis?

  1. A non-appraisal brokerage analysis
  2. A certified appraisal
  3. A title opinion
  4. A home inspection
Show answer and explanation

Answer: A non-appraisal brokerage analysis

A CMA can address pricing, marketing, or financial aspects but is expressly not an appraisal.

2. Who may prepare a statutory CMA under Illinois section 10-45?

  1. A real estate broker or managing broker
  2. Any unlicensed assistant
  3. Only a home inspector
  4. Only a tax assessor
Show answer and explanation

Answer: A real estate broker or managing broker

The section identifies those license categories and requires the preparer's license number and signature.

3. Which item must appear in an Illinois CMA?

  1. The intended purpose
  2. A guaranteed closing price
  3. The appraiser's certification
  4. A structural warranty
Show answer and explanation

Answer: The intended purpose

Purpose is one of the express written content requirements in section 10-45.

4. Which evidence shows current competition but not a completed transaction?

  1. Active listing
  2. Closed sale
  3. Recorded deed
  4. Settlement statement
Show answer and explanation

Answer: Active listing

The asking price shows a seller's offering and the alternatives buyers face.

5. What should control comparable selection?

  1. Competitive similarity and reliable transaction evidence
  2. Distance alone
  3. The highest available price
  4. The seller's preferred conclusion
Show answer and explanation

Answer: Competitive similarity and reliable transaction evidence

A comparable should appeal to a similar buyer pool and have verifiable, relevant characteristics and terms.

6. Can a CMA be the primary basis for a financial institution's mortgage-origination market value?

  1. No
  2. Yes, in every case
  3. Only when the seller agrees
  4. Only if no comparables exist
Show answer and explanation

Answer: No

Section 10-45 expressly excludes that use from its lienholder and third-party authorization.

7. What must a dual Illinois broker and appraiser show on the first page of a CMA?

  1. Broker capacity and broker license number
  2. Only the appraiser credential number
  3. No professional capacity
  4. A lender's license number
Show answer and explanation

Answer: Broker capacity and broker license number

Current rule 1450.790 keeps the brokerage CMA role distinct from appraisal practice.

8. Why should a broker analyze expired listings?

  1. They can show what the market rejected under specific offering conditions
  2. They always prove market value
  3. They guarantee a lower sale price
  4. They replace closed sales
Show answer and explanation

Answer: They can show what the market rejected under specific offering conditions

The broker still investigates price, condition, access, marketing, timing, and seller motivation.

9. Which conclusion is usually more honest when market evidence is mixed?

  1. A supported range with assumptions and strategy
  2. A guaranteed exact closing price
  3. The highest active list price
  4. An unexplained county average
Show answer and explanation

Answer: A supported range with assumptions and strategy

A range can communicate uncertainty while still supporting a list or offer recommendation.

10. When should a CMA be updated?

  1. When new material market or property evidence changes the decision
  2. Never after delivery
  3. Only after five years
  4. Only if the list price increases
Show answer and explanation

Answer: When new material market or property evidence changes the decision

A CMA is time-sensitive because listings, contracts, closings, concessions, inventory, and condition can change.

How should you study this area?

Session
Session 1
Focus
Memorize Illinois authority
Proof you are ready
Write the four permitted recipient or purpose groups and the seven required written content areas from section 10-45 without notes.
Session
Session 2
Focus
Build the subject file
Proof you are ready
For 12 properties, verify ownership, interest, area, condition, quality, improvements, zoning, permits, taxes, association, lease, restrictions, and data conflicts.
Session
Session 3
Focus
Read the full market
Proof you are ready
Analyze active, pending, closed, expired, withdrawn, and new-construction evidence for 10 cases, stating what each status proves and cannot prove.
Session
Session 4
Focus
Select and compare
Proof you are ready
Choose the best substitutes from 18 mixed datasets and explain time, location, site, design, quality, condition, size, utility, rights, and term differences.
Session
Session 5
Focus
Turn evidence into strategy
Proof you are ready
Produce 12 supported ranges and separate each from list-price or offer strategy, exposure, concessions, search brackets, net, and review timing.
Session
Session 6
Focus
Run C-O-M-P-S
Proof you are ready
Score at least 90 percent and explain every miss through client and capacity, observation, market, pricing differences, or strategy.

Do not count recognition as mastery. Close the notes and explain the rule, apply it to a new fact pattern, and identify why each distractor fails.

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Questions students ask about What Is a CMA? Illinois Real Estate Exam Guide

What is a comparative market analysis in Illinois?

Illinois defines a comparative market analysis, or CMA, as an analysis or opinion about pricing, marketing, or financial aspects of a specified real estate interest. It may use comparative market data, the broker's expertise, and other factors the broker or managing broker considers appropriate. A CMA is a brokerage product, not an appraisal.

Who can prepare a CMA in Illinois?

Section 10-45 authorizes a real estate broker or managing broker to prepare or provide a CMA for permitted purposes. A residential leasing agent is not included in that section's authorization. A sponsored broker must also work within the sponsoring broker's supervision, company policy, agency duties, and compensation rules.

When can an Illinois broker provide a CMA?

Permitted recipients and purposes include existing or potential buyers, sellers, lessors, and lessees; third parties making decisions or doing due diligence about a potential listing, offering, sale, option, lease, or acquisition price; and lienholders or other third parties, except as the primary basis for a financial institution's mortgage-loan-origination market value.

What must a written Illinois CMA contain?

Section 10-45 requires the intended purpose, a brief description of the real estate interest, a brief description of methodology, assumptions or limiting conditions, disclosure of the broker's existing or contemplated interest, the preparer's name, license number, and signature, and a substantially prescribed statement that the CMA is not an appraisal and the preparer was not acting as a state-certified appraiser.

Is a CMA the same as an appraisal?

No. Illinois definitions expressly say a CMA is not an appraisal under the Real Estate Appraiser Licensing Act. A CMA helps with brokerage pricing, marketing, acquisition, lease, or due-diligence decisions. An appraisal is a separately regulated value assignment performed by a properly credentialed appraiser under the applicable standards.

Is a CMA the same as a broker price opinion?

They overlap but the statutory definitions are not identical. A BPO is an estimate or analysis of probable selling price and may include varying detail about condition, market, neighborhood, and comparable sales. A CMA can address pricing, marketing, or financial aspects of one or more specified real estate interests using comparable data, broker expertise, and other appropriate factors.

How does a broker prepare a useful CMA?

The broker identifies the purpose and property interest, verifies subject facts, defines the competitive market, studies listings, pendings, expired or withdrawn listings, and closed sales, verifies transaction terms, adjusts or explains important differences, analyzes supply and demand, and presents a supportable price range and marketing strategy with assumptions and limitations.

Should a CMA give one exact price?

Not necessarily. A supported range can better express market uncertainty, property condition, competing inventory, buyer reaction, and different marketing strategies. A recommended list price can sit inside or occasionally outside the analytical range when the broker clearly explains the strategy, likely tradeoffs, and need to update the analysis as the market responds.

Can an Illinois CMA be used to originate a mortgage?

Section 10-45 does not permit a CMA or BPO to serve as the primary basis for determining market value for a financial institution's mortgage loan origination secured by the real estate. Other uses by a lienholder may be permitted, but the actual transaction, federal rule, lender policy, and appraisal or evaluation requirements must be checked.

What if an Illinois broker also holds an appraiser credential?

When that person prepares a CMA or BPO under the Real Estate License Act, current rule 1450.790 requires the initial page to show the broker or managing broker capacity and broker license number, not the appraiser credential number. Dual licensing does not allow the preparer to blur which professional role produced the report.

Are these official PSI questions or a CMA for a property?

No. The practice questions are original, and the primary sources were checked through August 1, 2026. A real CMA requires current property data, a defined purpose, the broker's actual inspection or data limitations, local market evidence, agency and confidentiality analysis, sponsoring-broker procedures, and all required Illinois disclosures.

Primary sources

The current official outline controls the tested scope. Statutes, regulations, and official agency materials control when a general study rule and a jurisdiction-specific rule differ.

Editorial status

Checked against primary sources

The Pass Illinois editorial team last checked this guide on August 1, 2026. Every practice question is an original study item, and the source links above let you verify the rules that support the lesson.

Read our editorial and corrections process

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