Illinois real estate exam glossary
Comparative market analysis (CMA)
Three nearby asking prices are not a market analysis. A useful CMA explains what the property competes with, which evidence deserves weight and what the numbers mean for a pricing decision. Illinois also gives CMA a specific legal meaning, including limits on who provides it and how it may be used.
Last reviewed:
The short answer
A comparative market analysis is an analysis or opinion about pricing, marketing or financial aspects of a specified interest in real estate. Illinois permits a broker or managing broker to provide it for the purposes in section 10-45. It is not an appraisal. A statutory CMA must be written, on paper or electronically, and include the required purpose, property-interest description, method, assumptions, interest disclosure, preparer identification and non-appraisal statement. The ordinary-course compensation exclusion below is important.
Reviewed for October 2026. PSI places CMA at national III.C.1 within Valuation, which has eight of the 100 scored national broker questions. That is not a separate CMA quota. This glossary teaches the Illinois distinction and original exam examples; it is not a completed report for a property.
Four decisions before preparing the analysis
- Define the purpose and recipient. Section 10-45 covers existing or potential buyers and sellers, lessors and lessees, specified transaction or acquisition due diligence, and lienholders or other third parties subject to its mortgage-origination restriction. Identify the property interest being analyzed, not just its address.
- Identify the role and compensation. The statutory authorization names brokers and managing brokers. Check the ordinary-course definition exclusion and any sponsorship or representation duties. A report recipient is not automatically the broker's client, and a separate fee does not turn a CMA into an appraisal.
- Use relevant, lawfully available evidence. Explain subject facts, data sources, competitive properties and meaningful differences. Active listings show competition; closed sales show completed transactions; pending prices and terms may be unknown or confidential. A nearby sale is not necessarily the best substitute.
- Write the conclusion with its limits. Complete the statutory report requirements where applicable, explain the supported range or conclusion, and distinguish it from asking strategy. Disclose meaningful uncertainty and update the analysis when material evidence changes. Do not promise a price or mortgage approval.
| Item | What the written statutory CMA needs | Why it matters |
|---|---|---|
| 1. Purpose | The intended purpose of the analysis | A report prepared for one decision is not automatically suitable for another |
| 2. Subject interest | A brief description of the real estate interest | Rights, interests and included property must be identifiable |
| 3. Method | A brief description of the methodology | A conclusion needs an explained basis |
| 4. Assumptions and limits | Any assumptions or limiting conditions | The reader needs to know what is unknown or conditional |
| 5. Broker interest | Any existing or contemplated interest in the subject real estate interest | A possible conflict must not remain hidden |
| 6. Preparer | Name, license number and signature of the broker or managing broker who developed it | A brokerage logo or job title alone is insufficient |
| 7. Non-appraisal statement | A statement substantially in the statutory form distinguishing the product and broker role from an appraisal | A disclaimer does not cure an otherwise prohibited use |
The distinctions that matter
| Distinction | How it works | What to notice |
|---|---|---|
| A statutory CMA and ordinary brokerage work | The definition excludes a broker's or managing broker's ordinary-course activity when no compensation is paid other than compensation based on a sale or rental. | Do not label every ordinary listing-price discussion a separately regulated statutory CMA. The exclusion does not erase licensing, honesty, confidentiality or other applicable brokerage duties. |
| CMA and BPO | A CMA can address pricing, marketing or financial aspects. A BPO is framed as an estimate or analysis of probable selling price. Both are distinguished from appraisals. | Use the particular Illinois definitions rather than treating the two labels as identical in every respect. |
| CMA and appraisal | A compliant brokerage CMA is a different product from an appraisal under the Appraiser Licensing Act. Section 5-5(c) recognizes the compliant broker-product exception. | Holding a broker license is not blanket authority to perform appraisals. A separate fee, detailed report or non-appraisal disclaimer does not remove the statutory boundaries. |
| Permitted lender use and mortgage origination | Section 10-45 allows certain lienholder or third-party purposes but excludes using the product as the primary basis for market value in a financial institution's mortgage origination secured by the property. | Do not turn that specific restriction into either a ban on every lender use or permission to use a CMA whenever an appraisal exemption exists. The institution must follow its lawful valuation process. |
| A market indication and an asking strategy | The analysis expresses what the evidence supports under stated assumptions. The seller's asking price is a marketing choice. | An optimistic asking price is not evidence of a completed sale. Explain the strategy separately instead of changing the analysis to match a preferred number. |
| Broker and appraiser capacities | A person holding both credentials must identify the actual role. Rule 1450.790(a) requires the broker or managing broker name and license number, not the appraiser number, on the initial CMA/BPO page. | Dual licensing does not make a brokerage CMA an appraisal. The statutory preparer signature and substantial non-appraisal statement still matter. |
Work through the facts
No separate analysis fee in ordinary brokerage work
A broker discusses a potential listing's asking strategy in the ordinary course of brokerage business. No compensation is paid other than compensation based on a future sale.
- Apply the definition's ordinary-course compensation exclusion.
- Do not infer that all duties disappear, or that an unlicensed person receives the broker's authority.
Answer: On the stated facts, the activity is excluded from the technical statutory CMA definition. Other applicable brokerage duties remain.
A separate report for acquisition due diligence
A third party pays a broker a separate fee for a pricing analysis of a real estate interest it is considering acquiring.
- Acquisition-price due diligence is among the section 10-45(a)(3) purposes.
- The ordinary-course sale-or-rental-compensation exclusion is not established merely because the preparer also sells homes.
- Complete the written requirements and analyze any conflict or role limitations.
Answer: A permitted purpose does not dispense with the report's required contents or turn it into an appraisal.
The missing signature
A statutory CMA describes the property interest, purpose, method, assumptions and broker interest. It contains the non-appraisal statement and the preparer's name and license number, but no signature.
- Section 10-45(b)(6) requires the developing broker's or managing broker's name, license number and signature.
- The other complete sections do not replace the missing element.
Answer: The statutory written-content checklist is incomplete. A brokerage logo is not a substitute.
Two credentials, one actual assignment
An Illinois managing broker who is also a certified residential appraiser prepares a CMA in the brokerage capacity.
- The report remains a CMA under the stated assignment.
- Use the managing broker name and license number on the initial page, not the appraiser credential number.
- Include the remaining statutory contents and distinguish the actual capacity.
Answer: Do not imply that the brokerage CMA was performed as a certified appraisal.
The prohibited primary basis
A financial institution wants a CMA as the primary market-value basis for originating a mortgage secured by the subject real estate.
- All parts of the statutory restriction are supplied: financial institution, origination, secured property and primary market-value basis.
- Adding a non-appraisal disclaimer does not authorize that use.
Answer: The requested use falls outside section 10-45's permission. The institution needs its lawful valuation process, not a relabeled CMA.
An asking price is not a closing
An active listing asks $650,000 after 140 days and two reductions. Verified competitive closed sales support $570,000-$590,000 under the stated conditions.
- The listing establishes an offered choice, not an achieved sale.
- Investigate exposure, condition and other differences rather than adopting the largest number.
- The supplied range does not guarantee what another property will sell for.
Answer: Explain what each source establishes. The $650,000 ask alone does not prove a $650,000 probable sale price.
A concession needs analysis
A comparable closed at $505,000 with a $20,000 seller concession. The facts do not quantify its effect on the price.
- Verify the terms and market reaction.
- The recorded price is not automatically equivalent to a no-concession transaction.
- Nor does the amount alone establish an automatic $485,000 adjusted indication.
Answer: The evidence is insufficient to assign a precise adjustment. The concession's price effect, rather than an unsupported subtraction, is the missing fact.
A contemplated purchase is material to the report
The broker developing a statutory CMA is also considering buying the subject interest.
- Section 10-45(b)(5) covers existing or contemplated broker interests in the subject real estate interest.
- A desire to preserve a competitive advantage does not justify omitting the disclosure.
Answer: Disclose the contemplated interest in the CMA and address other applicable conflict and agency duties.
Mistakes to avoid
- A detailed CMA becomes an appraisal. Product authority and actual capacity matter; detail or a fee does not confer appraisal authority.
- A seller credit always means a dollar-for-dollar price deduction. Verify the market effect before assigning a precise adjustment.
- Every ordinary price discussion is a statutory CMA. Apply the ordinary-course compensation exclusion and retain other brokerage duties.
- A disclaimer cures any use. The written contents and permitted-purpose restrictions both apply.
Check your understanding
These are original teaching questions, not recalled or predicted PSI questions. Answer first, then explain why the other choices fail.
1. What is a CMA under the Illinois definition?
- A structural inspection
- An analysis or opinion about pricing, marketing or financial aspects of a specified real estate interest
- A guarantee of a future sale price
- A certified appraisal whenever a broker charges a fee
Show answer and explanation
Answer: B. An analysis or opinion about pricing, marketing or financial aspects of a specified real estate interest
Illinois defines a CMA in terms of the specified interest and pricing, marketing or financial aspects. It expressly distinguishes it from an appraisal. A fee does not change that, and neither a guaranteed sale nor structural inspection is the definition.
2. Which preparers are named in section 10-45's authorization?
- Only certified appraisers
- Residential leasing agents acting on their own under this section
- Real estate brokers and managing brokers
- Any person with local market knowledge
Show answer and explanation
Answer: C. Real estate brokers and managing brokers
The section names real estate brokers and managing brokers. It does not independently authorize an unlicensed person or a residential leasing agent to provide a statutory CMA in that capacity. Appraiser credentials alone are not its broker authorization.
3. Which facts establish the definition's ordinary-course exclusion?
- Any free valuation by an unlicensed person
- Any separately paid report if called informal
- An ordinary brokerage pricing discussion, with no compensation other than compensation based on a sale or rental
- Any paid appraisal by a broker
Show answer and explanation
Answer: C. An ordinary brokerage pricing discussion, with no compensation other than compensation based on a sale or rental
The exclusion has both ordinary-course broker activity and the stated compensation condition. It is not blanket permission for unlicensed valuation, a paid appraisal or evasion by changing a report label.
4. A statutory CMA has the preparer's name and license number but lacks a signature. Which conclusion is correct?
- A signature is required only on appraisals
- A logo supplies the signature automatically
- The written-content requirement is incomplete
- No signature is required for electronic writing
Show answer and explanation
Answer: C. The written-content requirement is incomplete
Section 10-45(b)(6) requires name, license number and signature. Electronic or paper format does not remove that element; neither a logo nor a distinction from an appraisal supplies it.
5. Which statement describes the mortgage-origination restriction accurately?
- The product may not be the primary market-value basis for a financial institution's mortgage origination secured by the subject property
- Every possible report to a lienholder is forbidden
- The seller may waive the restriction
- A financial institution may use the CMA as its primary origination value basis if it has a disclaimer
Show answer and explanation
Answer: A. The product may not be the primary market-value basis for a financial institution's mortgage origination secured by the subject property
The restriction concerns the specified primary market-value basis, institution, origination and security. It does not ban every lienholder use, and a disclaimer or seller agreement does not remove it.
6. A dual Illinois broker/appraiser produces a CMA as a broker. What belongs on the initial page under rule 1450.790(a)?
- Only the sponsoring company's logo
- No license number if a disclaimer appears
- Only an appraiser credential number
- The broker or managing broker name and license number, rather than the appraiser number
Show answer and explanation
Answer: D. The broker or managing broker name and license number, rather than the appraiser number
The rule requires the individual's broker or managing broker name and license number for the actual brokerage role, not the appraiser number. A company logo does not replace that identity. The statutory preparer signature remains separately required.
7. A broker is considering purchasing the subject interest of the statutory CMA. Which response is required?
- Omit it if the analysis gives a range
- State only that all brokers are interested in real estate
- Disclose the contemplated subject interest
- Hide it until closing
Show answer and explanation
Answer: C. Disclose the contemplated subject interest
Section 10-45(b)(5) expressly includes contemplated interests in the subject interest. Generic boilerplate about the industry and waiting for an actual purchase do not replace the disclosure.
8. Which evidence represents an offered price rather than a completed transaction price?
- A verified closed-sale price
- A closed comparable's verified sale price
- An active listing's asking price
- A settled transaction's verified consideration
Show answer and explanation
Answer: C. An active listing's asking price
An active ask shows present competition or strategy. The remaining choices describe completed transactions, which still require verification and relevant comparison; none guarantees the subject's future price.
9. A $505,000 comparable has a $20,000 concession, but its market price effect is unknown. What is justified?
- Automatically report $525,000
- Ignore the concession in every case
- Automatically report $485,000
- Verify and support the treatment before assigning an adjustment
Show answer and explanation
Answer: D. Verify and support the treatment before assigning an adjustment
Neither automatic subtraction, addition nor universal disregard is supported. The facts establish the concession amount, not its precise market effect. The analysis needs evidence and an explanation.
10. Which statement about the non-appraisal disclosure is correct?
- The report must include a statement substantially in the statutory form, and that does not cure a prohibited use
- Any one-word disclaimer replaces every other requirement
- It is unnecessary if the report is detailed
- It makes the preparer a certified appraiser
Show answer and explanation
Answer: A. The report must include a statement substantially in the statutory form, and that does not cure a prohibited use
Section 10-45(b)(7) requires the substantial statutory statement. Detail, a short label or an otherwise forbidden use does not erase the requirements; the statement does not confer an appraisal credential.
11. A seller wants an asking price above the analysis's supported range. What is the useful distinction?
- Treat the asking price as an achieved sale
- Separate the market evidence from the asking strategy and explain the tradeoffs
- Change the range without evidence
- Guarantee the seller's preferred price
Show answer and explanation
Answer: B. Separate the market evidence from the asking strategy and explain the tradeoffs
A market indication and asking strategy are different. The broker should explain evidence, assumptions and exposure tradeoffs rather than rewrite the analysis, treat an ask as a closing or promise an outcome.
12. What does section 10-45 itself prescribe about the number of closed comparables in every Illinois CMA?
- Exactly five whenever a fee is paid
- Only the three nearest sales
- No universal fixed count; the report must state its methodology and relevant limits
- Exactly three, with no exceptions
Show answer and explanation
Answer: C. No universal fixed count; the report must state its methodology and relevant limits
The complete section does not impose a universal closed-sale count. It specifies permitted purposes and written contents, including methodology and assumptions or limiting conditions. A mortgage-appraisal program's comparable-count rule is not automatically a rule for every CMA. This does not authorize an unsupported conclusion.
Common questions
What does CMA stand for?
Comparative market analysis. Illinois defines it as an analysis or opinion about pricing, marketing or financial aspects of a specified real estate interest, potentially using comparative data, broker expertise and other appropriate factors. The technical definition also contains the ordinary-course compensation exclusion.
Who can prepare a statutory CMA in Illinois?
Section 10-45 authorizes a real estate broker or managing broker for its listed purposes. A residential leasing agent is not independently included in that authorization. Sponsored licensees must also observe their actual authority, supervision and other applicable brokerage duties.
Does every free listing presentation require a statutory CMA?
No. The definition excludes ordinary-course broker activity when no compensation is paid other than compensation based on a sale or rental. Apply the actual facts instead of treating free as a universal exemption. The exclusion does not suspend licensing, honesty or confidentiality duties.
Can a CMA be verbal?
A statutory CMA under section 10-45 must be written, either on paper or electronically, with the required contents. An ordinary brokerage discussion that falls within the definition's exclusion is a different question. Do not use the writing requirement to erase that distinction.
What are the seven required content areas?
Purpose; a brief description of the subject real estate interest; a brief method description; assumptions or limiting conditions; existing or contemplated broker interest; preparer name, license number and signature; and the substantial statutory non-appraisal statement. Subsection (b)(8) permits other items the broker considers appropriate; it does not make the preceding items optional. A company name or logo does not replace the individual developing preparer's required identity and signature.
What must the non-appraisal statement communicate?
It must substantially follow section 10-45(b)(7), identifying the report as a BPO/CMA rather than a market-value appraisal and explaining that the licensed broker or managing broker was not acting as a state-certified appraiser. Consult the linked statutory text for the prescribed form. A short title alone is not the full requirement.
Is a CMA an appraisal if the broker charges for it?
No. The fee does not confer an appraiser credential or convert the product into an appraisal. Illinois distinguishes the products, and the Appraiser Licensing Act exception concerns a broker product complying with section 10-45. A disclaimer alone does not authorize noncompliant practice.
Is a BPO the same as a CMA?
The definitions overlap but differ. A BPO is framed around probable selling price; a CMA can address pricing, marketing or financial aspects. Both have the ordinary-course compensation exclusion and are distinguished from appraisals. For statutory reports, section 10-45 supplies the written-content and permitted-purpose rules.
Can a lender receive a CMA?
Some purposes are permitted. The specific exclusion is use as the primary basis for market value for a financial institution's mortgage origination secured by the subject real estate. Do not translate that into all lender uses are prohibited or all appraisal-exempt loans may use a broker CMA. The actual lawful appraisal or evaluation process still matters.
What if the broker is also a licensed appraiser?
Identify the role actually used. For a brokerage CMA or BPO, rule 1450.790(a) requires the broker or managing broker name and license number, not the appraiser number, on the initial page. The statutory non-appraisal statement and the developing preparer's signature also remain relevant.
Does Illinois require exactly three sales for every CMA?
Section 10-45 does not prescribe a universal three-sale checklist. Choose enough relevant evidence for the stated analysis and explain the method and limits. Do not import a particular mortgage-appraisal program's comparable-count rule into every Illinois CMA.
Can a CMA guarantee a price or mortgage approval?
No. A supported conclusion or range is conditional on its property facts, evidence, purpose and date. An asking strategy is not a completed sale. Financing, inspection, appraisal, buyer response and later market changes can affect an actual transaction. These original exercises are not a property report or a validated exam-readiness measure.
Keep practising
Your next practice step
Put valuation into practice
Choose the approach or value principle that fits the facts, then check your reasoning.
These web resources are free. The app has a separate free starter tier and optional paid full access.
Official sources and scope
Illinois sections 1-10 and 10-45 define the product, ordinary-course exclusion, permitted purposes and written contents. Rule 1450.790 separates a dual licensee's broker and appraiser roles; the Appraiser Licensing Act recognizes a compliant broker-product exception. The confidentiality rule addresses safeguarding information. Fannie Mae materials illustrate competitive evidence and supported adjustments, not legal comparable-count requirements for every CMA. The PSI outline supplies exam placement; examples and questions are original.
- 225 ILCS 454/1-10: CMA, BPO and ordinary-course compensation exclusion
- 225 ILCS 454/10-45: permitted uses and complete written-report contents
- 68 Ill. Adm. Code 1450.790: dual-license identity and deficient reports
- 225 ILCS 458/5-5: appraisal licensing and selected exceptions
- 68 Ill. Adm. Code 1450.800: confidentiality safeguards
- PSI June 24, 2026: CMA, BPO or equivalent at III.C.1
- Fannie Mae B4-1.3-08: comparable selection
- Fannie Mae B4-1.3-09: market-supported comparable adjustments
This is exam preparation, not advice for a specific transaction. State law and the applicable facts control. Our editorial and corrections process explains how to report an issue.