BROKERAGE SERVICESBROKER's OPINION OF VALUE (BOV)
WHY DO YOU NEED A MARKET VALUATION OR BROKER’S OPINION OF VALUE?
Market valuations are an important part of the real estate transaction process and may be used to determine the value of a property for many different purposes. Common reasons include:
- Valuation to buy or sell a property
- Determining the amount of a new loan, or refinancing an existing loan
- Determining value in order to buy a partner’s or investor’s interest in a property
- The protest of real estate taxes
- The valuation of a business (should the business own the property)
- Determining property value for estate planning or inheritance tax purposes
WHAT ADVANTAGES DOES A BROKER’S OPINION OF VALUE PROVIDE?
Most often, market valuations are prepared by a member of the Appraisal Institute (MAI), using an industry-determined process, in the form of a formal valuation, or “appraisal”. In order to determine value, appraisers use replacement cost data, market data, and sales comparable data. Typically, the appraiser obtains the market and sales data directly from the brokerage community.
Property owners requiring an opinion of value, but who do not require a formal appraisal, can achieve their goal by engaging an experienced professional real estate broker. The broker performs what is known in the industry as a Broker’s Opinion of Value (BOV). In today’s environment of distressed sales and limited sale and lease comparables, lenders will generally seek both a formal appraisal and a BOV in order to best determine and understand current value.
BOVs are generally preferred for sale valuations, but can be utilized to determine market lease rates as well.
HOW DO OUR BROKERS DETERMINE AN OPINION OF VALUE?
When performing a BOV, the broker visits the property, gathers information regarding its physical attributes and those of the surrounding area, and reviews the market for recent comparables. He/She will also review the market for currently available properties that are similar to the property being valued. If appropriate, the broker will review tenant leases and property expenses. Market trends are also factored in, as are any of the subject real estate’s other unique attributes.
WHAT INFORMATION IS INCLUDED IN A BOV?
A BOV offers an opinion of the property’s value based not only on the market data, but also on the broker’s experience both in that particular market and with the current overall market conditions. A BOV generally includes the following:
- Description of the property’s physical characteristics
- Description of the neighborhood in which the property is situated
- Historical and current market data
- Property photographs
- Sales comparables
- Comparable properties for sale
- Market valuation
- The broker’s opinion of current market value
WHY IS A BOV FROM PODOLSKY|CIRCLE THE RIGHT CHOICE FOR YOU?
BOVs generally offer a much more cost-effective market valuation than formal appraisals. Owners rely on our brokers’ expertise since they are immersed in the market and generally have more real-time information than appraisers, who tend to rely solely on historical data.
The Principals and Senior Brokers at Podolsky|Circle are all experienced in creating Broker’s Opinion of Value for new and long-standing clients. Podolsky|Circle is the smart, cost-effective way to obtain a current and accurate valuation of your property – on a local, national or international level.