Broker Price Opinion

A popular way of estimating the value of a property is the broker price opinion (BPO), also known as a broker opinion of value (BOV). Typical reasons for ordering a broker price opinion include estimating value prior to purchase or sale, understanding collateral value when securing a new loan or refinancing, estimating liquidation value, buying out a partner’s interest in a property, among many others.

Broker Price Opinion vs Appraisal

The main difference between a broker price opinion and an appraisal is the cost. Being less comprehensive than a full appraisal, the broker price opinion is usually less than the price of a full appraisal. It’s also important to note that an appraisal is provided by a third-party not involved in the real estate transaction. On the other hand, a broker price opinion may be performed by a broker that is actively involved in the transaction.

The broker price opinion has become popular in recent years during the recession and banking crises, and due to the increased attention it will likely remain a popular way to estimate market value. While each individual broker price opinion will vary depending on the particular needs of the client and attributes of the property, the above information should give you a good foundation for understand any broker price opinion.