Texas Real Estate Sales Agent ExamTexas Real Estate LawMedium
A real estate sales agent is preparing a Comparative Market Analysis (CMA) for a seller client. In order to provide an accurate assessment of market value, which of the following actions is the sales agent permitted to perform under TREC Rules?
- AGuarantee a specific sale price based on the CMA findings.
- BProvide a written appraisal of the property's value, charging a fee for the service.
- CPrepare a CMA and provide an opinion of value, clearly stating it is not an appraisal.
- DRepresent the CMA as an appraisal report to the seller and potential buyers.
Show answer & explanationAnswer & explanation
Correct answer: C. Prepare a CMA and provide an opinion of value, clearly stating it is not an appraisal.
Real estate licensees are permitted to prepare CMAs and provide an opinion of value to assist clients, but they must clearly state that it is not an appraisal. Only licensed appraisers can perform appraisals.
Why the other options are wrong
- A. Guaranteeing a sale price is unethical and unrealistic, as market conditions can change.
- B. Real estate agents are not licensed appraisers and cannot perform or charge for appraisals.
- D. Presenting a CMA as an appraisal is misrepresentation and unauthorized practice of appraisal.
Comparative Market Analysis (CMA)
An analysis of the prices of recently sold homes that are similar to a subject property in terms of location, size, and features, used to estimate the property's current market value.
- Prepared by real estate agents.
- Provides an opinion of value, not an appraisal.
- Used to help sellers set listing prices and buyers make offers.
Memory trick: CMA's 'M' is for Market, not for Measuring like an Appraiser.