Last updated: April 2026. Navigating the Humber College Real Estate Education Program requires a deep understanding of property valuation. As a future real estate professional in Ontario, one of the most critical skills you will develop is the ability to perform a Comparative Market Analysis (CMA). Whether you are helping a seller set a listing price or advising a buyer on a competitive offer, the CMA is your primary tool. For a broader look at what to expect on your licensing journey, be sure to review our Complete Ontario Real Estate Salesperson Exam Exam Guide.

This comprehensive guide will break down the CMA process, highlight the regulatory requirements under Ontario law, and provide practical formulas to help you ace the valuation questions on your exam.

What is a Comparative Market Analysis (CMA)?

A Comparative Market Analysis (CMA) is an estimate of a property's value based on the recent sales, active listings, and expired listings of similar properties (comparables) in the same geographic area. It is vital to remember for your exam that a CMA is not a formal appraisal. Appraisals can only be conducted by designated appraisers (such as those credentialed by the Appraisal Institute of Canada), whereas a CMA is an estimate of market value prepared by a registered real estate salesperson or broker.

The Regulatory Framework: TRESA and CMAs

In Ontario, real estate professionals are governed by the Trust in Real Estate Services Act, 2002 (TRESA), which replaced the Real Estate and Business Brokers Act (REBBA). The Real Estate Council of Ontario (RECO) enforces this legislation.

Under the TRESA Code of Ethics, registrants have a strict duty to provide conscientious and competent service. When preparing a CMA, this means:

  • Accuracy: You must use accurate, up-to-date data from the Multiple Listing Service (MLS®) or land registry systems.
  • Objectivity: You cannot manipulate data to artificially inflate a property's value just to secure a listing.
  • Transparency: You must be able to explain your methodology to your clients, showing exactly how you arrived at your suggested price range.

The 4-Step CMA Process for the Ontario Exam

Exam questions will frequently test your knowledge of the CMA workflow. You must understand the chronological order of these steps.

1. Analyze the Subject Property

Before looking at the market, you must thoroughly evaluate the "subject property" (the property you are trying to value). You need to note its location, age, lot size, square footage, number of bedrooms and bathrooms, structural condition, and any unique features. You must also be aware of any legal limitations, which is why understanding easements and encumbrances is crucial, as these can negatively impact a property's market value.

2. Select the Right Comparables

The golden rule of selecting comparables is finding properties that are as similar to the subject property as possible. A strong CMA typically includes:

  • Sold Properties: The most reliable indicator of market value. Look for properties sold within the last 30 to 90 days.
  • Active Listings: Shows the current competition. It tells you what buyers are currently comparing your subject property against.
  • Expired Listings: Shows what the market is unwilling to pay. This is an excellent tool for managing a seller's unrealistic price expectations.

3. Make Adjustments (The Golden Rule of Valuation)

Because no two properties are exactly identical, you must make monetary adjustments to the comparables. Exam Tip: Never adjust the subject property. You always adjust the comparable property to make it equal to the subject.

Memorize these two acronyms for your exam:

  • CBS (Comparable Better, Subtract): If the comparable property has a feature the subject lacks (e.g., a swimming pool), you subtract the value of that feature from the comparable's sale price.
  • CWA (Comparable Worse, Add): If the comparable property lacks a feature the subject has (e.g., an extra bathroom), you add the value of that feature to the comparable's sale price.

4. Reconcile the Data

Reconciliation is the final step where you review the adjusted sale prices of your comparables to determine a final estimate of value. You do not simply average the numbers. Instead, you give more weight to the comparable that required the fewest adjustments, as it is the most similar to the subject property.

Market Factors Influencing Value in Ontario

When selecting comparables, not all features are weighted equally. Location will always trump minor cosmetic features. Below is a breakdown of how different criteria are typically weighted when selecting comparables in a standard Ontario residential CMA.

Typical Weight of Selection Criteria in Ontario CMAs (%)

CMA Adjustment Scenario (Exam Prep)

Let's look at a practical scenario you might encounter on your Course 3 exam. Understanding the exam format and structure overview will help you realize that math and logic scenarios are heavily featured.

The Scenario:

  • Subject Property: 3 bedrooms, 2 bathrooms, single-car garage.
  • Comparable Property: 3 bedrooms, 2 bathrooms, double-car garage. Sold last week for $850,000.
  • Market Value of a Garage Space: The market dictates that a second garage space is worth $25,000.

The Math:

Apply the CBS/CWA rule. Is the comparable better or worse than the subject? The comparable is better because it has a double-car garage, while the subject only has a single. Therefore, we use CBS (Comparable Better, Subtract).

$850,000 (Comp Sale Price) - $25,000 (Adjustment for extra garage space) = $825,000.

The adjusted value of the comparable is $825,000. This indicates that if the comparable had a single-car garage like the subject, it would have sold for $825,000.

Maintaining Your Competence

Mastering the CMA is not just for passing the exam; it is a vital, ongoing skill. Real estate markets fluctuate, and valuation techniques evolve. RECO requires all registrants to stay updated through mandatory continuing education requirements, ensuring your CMA skills remain sharp and compliant with the latest TRESA regulations throughout your career.

Frequently Asked Questions (FAQs)

1. What is the difference between a CMA and an appraisal in Ontario?

A CMA is an estimate of market value performed by a registered real estate salesperson or broker to help clients make pricing decisions. An appraisal is a formal, objective valuation performed by a licensed appraiser (e.g., AACI or CRA) and is typically required by financial institutions for mortgage financing purposes.

2. How far back should I look for sold comparables?

In a stable market, you should ideally look for properties that have sold within the last 90 days. However, in a rapidly changing or volatile market, you may need to restrict your search to the last 30 days to ensure the data accurately reflects current market conditions.

3. Do I adjust the subject property or the comparable property?

You must always adjust the comparable property. The goal of a CMA is to make the comparable look exactly like the subject property to determine what the comparable would have sold for if it had the same features.

4. What does the acronym CBS stand for in real estate valuation?

CBS stands for "Comparable Better, Subtract." If the comparable property has a superior feature compared to the subject property, you subtract the monetary value of that feature from the comparable's sale price.

5. Why is it important to include expired listings in a CMA?

Expired listings provide crucial data on market resistance. They show sellers what buyers in the current market are unwilling to pay for a similar property, helping to prevent the seller from overpricing their home.

6. Can I use properties from a different city as comparables?

Generally, no. Comparables should be in the same neighbourhood or a highly similar competing neighbourhood. Using properties from different cities violates the principle of substitution, as different municipalities have different property taxes, amenities, and market drivers.