A Price Range, Never a Single Number
The conclusion of a CMA is a price range. This course teaches it as a professional standard: the analysis states the range the closed sales support, and the list price recommendation is a figure placed within that range for a stated reason. The analysis never concludes with a single number standing alone, and it never calls its result a value. This lesson explains why the standard is set that way and how the range is drawn from the reconciled indicators.
The market speaks in a range
A closed sale records what one buyer and one seller agreed to on one day. A second sale of an identical house a week later could well have closed at a somewhat different figure, with a different buyer and a different negotiation. The adjusted indicators on any grid show this directly: three sales, each corrected to stand in for the subject, still land several thousand dollars apart. Once the grid has been checked, that spread is largely the width of what buyers of this kind of property have paid, and the analysis reports it faithfully by reporting a range.
A single number implies a certainty the evidence does not have. Presented to a seller, it tends to become the figure the seller remembers and measures later offers against. Presented as a range, the same evidence tells the seller where buyers have been and leaves the list price as a decision to be made within it, which is what the list price is.
Why the word “value” is reserved
The word “value” is reserved. A broker or agent does not perform an appraisal. A single figure presented as what a property is worth reads like an appraisal; a range keeps the CMA what it is under Connecticut law, a market analysis. A CMA prepared by a licensee for listing, selling or buying purposes is not an appraisal under Connecticut law, and the analysis is kept from resembling one in its language as well as its form. The office’s result is a price range, a pricing position, or a list price recommendation. It is never a value, an estimated value, or a market value, and the analysis does not describe itself as determining, establishing or setting any of those. The market establishes value; the appraiser measures it; the broker and agent produce a price range.
The distinction has a practical edge. A seller who has been told the house “is valued at $465,000” and later learns that a $465,000 contract price was not supported when the property was appraised has been given a figure the market did not confirm, and the office is asked to explain what was wrong. A seller who was told the sales support a range of $452,000 to $462,000 and chose to list at $464,900 is in a different position, because the analysis stated where the sales were and the seller’s choice was recorded beside it.
How wide the range is
The range is drawn from the weighted indicators, not from the unadjusted sale prices and not from the lowest and highest indicator taken as fixed edges. Where the indicators cluster tightly, the range is narrow, and the reconciliation places most of its width around the most similar sale. Where the indicators spread more widely, the range is wider, and the analysis says why: the market has been moving, the subject sits between two recognizable price tiers, the condition or location adjustments carry more uncertainty than usual, or the subject has a feature that the sales share unevenly. A wide range is not a weakness when the reason is stated. A wide range with no reason stated is a sign that the reconciliation has not been done.
A tight cluster does not convert the range into a single figure. Three indicators at $468,000, $472,000 and $475,000, with the most weight on the $472,000 sale as the closest match, support a range of approximately $469,000 to $474,000, drawn around that sale, and the tightness of the cluster is reported as confidence in that range, not as permission to state one number.
The list price recommendation inside the range
The list price recommendation is one figure, and it is presented with the range around it and the reason for its position. “The closed sales support a range of $452,000 to $462,000. Given the two similar houses that went under contract this month while listed at $454,900 and $459,900, the recommended list price is $457,900.” The seller sees the evidence, the range, and the position in one sentence, and the recommendation reads as what it is: a decision within a supported range, made for a reason the seller can examine.
Application
A draft CMA for a 1,750-square-foot cape concludes: “Based on the comparables, the value of the property is $438,000.” The grid beneath it is sound, with three well-chosen sales reconciled to indicators of $431,500, $436,200 and $441,800.
The conclusion is reworded. The most weight goes to the $436,200 sale, the closest match, and the weighted indicators support a range of approximately $433,000 to $440,000, drawn around that sale. The rewritten conclusion reads: “The closed sales support a price range of $433,000 to $440,000. The recommended list price is $437,900, near the sale most similar to the subject, and below the one active listing of the same size in the subdivision.” The word “value” does not appear, and the seller receives a range, a position and a reason rather than a number.
Summary
A CMA concludes with a price range because the market’s evidence is a range: three corrected sales still differ, and once the grid has been checked, the difference is largely the width of what buyers have paid. The range is drawn from the weighted indicators, narrow when they cluster and wider with a stated reason when they do not, and the list price recommendation is a single figure placed within it for a reason the seller can follow. The market establishes value; the appraiser measures it; the broker and agent produce a price range, and the office’s result is named for what it is: a price range and a pricing position.