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Does the Comparative Market Anaylsis (CMA) follow New Zealand REA Rules 

In Short: Yes, here is some information below regarding your legal requirements under New Zealand REA Rules when creating a Comparative Market Analysis (CMA)

CMA Legal Requirements Under New Zealand REA Rules

In New Zealand, a Comparative Market Analysis (CMA) is a legally required appraisal document that real estate agents must provide to sellers before listing a property. Here are the key requirements that make a CMA legal and compliant under the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2012:

Must-Have Legal Requirements

Rule 10.2 - Appraisal Content Requirements

An appraisal (CMA) must satisfy three essential conditions:​

  1. Written Format: The appraisal must be provided in writing to the client by a licensee​

  2. Realistic Market Conditions: It must realistically reflect current market conditions, PropertyLM provides this by using live, up to date data of sales, listings and market insights to form the CMA.​

  3. Supported by Comparable Data: It must be supported by comparable information on sales of similar land in similar locations or businesses. PropertyLM provides this being comparing each sales and listings active in a 500 meter radius of the subject property within the last 6 months and using this data to provide comparitive insights against each property including weighting. This analysis is included in every report created.​

Rule 10.3 - Data Availability Disclosure

If comparable or semi-comparable sales data does not exist, the licensee must explain this in writing to the client. This ensures transparency when limited data is available for the analysis.​

Professional Presentation Requirements

According to REA guidance, agents must not simply present a collection of data to clients. The appraisal must include evidence of professional analysis. Specifically:​

  • Agents should explain how the property compares to other recent sales

  • They must be able to explain which properties they included for comparison and why certain properties were excluded

  • The analysis must translate the comparable data into the appraised price arrived at for the client's property

  • Any adjustments made to comparable properties must be clearly explained to the client

When a CMA is Required

A CMA must be provided before the agency agreement is signed. Every agency agreement must be accompanied by a current market appraisal.​

Timing and Compliance

Failure to provide a properly completed CMA is a serious breach of professional obligations. Cases where agents have failed to provide a CMA have resulted in disciplinary action, including fines and licence cancellation.​

Key Point: CMA is Not a Valuation

It is important to note that a CMA is not a professional valuation. The purpose of an appraisal is to help sellers understand the price they may be able to sell their property for based on comparable market data, rather than providing an official valuation figure.

Disclaimer

All information presented is based on data provided by the Real Estate Institute of New Zealand (REINZ). Content is intended for general guidance and should be checked and confirmed by a registered real estate agent before being published or relied upon for any decision-making purposes.​