Comprehensive and Detailed Explanation (150–250 words):
A competitive market analysis (CMA) is a tool prepared by real estate licensees to help sellers establish a listing price and to help buyers determine an appropriate offer. It compares recent sales of similar properties, active listings, and expired listings to estimate a property’s fair market value.
A: Insurance companies use replacement cost appraisals, not CMAs.
B: Depreciable value is for tax accounting and appraisals, not CMAs.
C: Local tax assessments do not typically reflect current market value and are not the basis of a CMA.
Because it helps both sellers and buyers understand market value, the correct answer is D.
[Reference: Massachusetts Real Estate Salesperson Candidate Handbook – Valuation and Market Analysis., ]
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