What is a broker opinion of value?

A broker opinion of value (BOV) is a commercial real estate broker's written estimate of the price a property would likely sell for in the current market. It is based on comparable sales, the property's income and local market conditions. A BOV is an informed opinion rather than a formal appraisal, and it is usually prepared to help an owner decide whether, when and how to sell.

BOV and broker price opinion (BPO) describe the same kind of estimate. Commercial brokers tend to say BOV. BPO is more common in residential lending, where banks and loan servicers order quick valuations on homes, often for refinancing, foreclosure or loss mitigation work.

Many BOVs are free. A broker prepares one as part of a pitch to win the listing, which is why the document usually includes a marketing plan and the broker's track record alongside the valuation. Owners, lenders and investors also commission BOVs outside a listing pitch, and in those cases the broker typically charges a fee.

Broker opinion of value vs. appraisal

The difference between a BOV and an appraisal is who prepares it and what it can be used for. A BOV is prepared by a licensed real estate broker, follows no mandated format and is often free. An appraisal is prepared by a state-licensed or certified appraiser under the Uniform Standards of Professional Appraisal Practice (USPAP), and it is the valuation lenders rely on for financing.

Federally regulated banks generally need an appraisal from a state-certified appraiser for commercial real estate loans above $500,000, so a BOV cannot stand in for one in most commercial financing. Federal law (12 U.S.C. § 3355) also bars broker price opinions from being the primary basis of value for a mortgage on a buyer's primary residence, and states add their own rules on who may prepare a BOV and what it must disclose.

What goes into a broker opinion of value?

A commercial BOV typically includes a value conclusion, a property description, an income analysis, comparable sales and listings, a market overview and the broker's pricing recommendation. Content varies by broker and asset type, but owners, buyers and lenders expect to see how the number was reached, not only the number itself.

• Executive summary and recommended value range

• Property description

• Ownership, sale and debt history

• Rent roll, operating statements and pro forma net operating income (NOI)

• Comparable sales and listings

• Market overview

• Valuation analysis and reconciliation

• Pricing and marketing plan

• Broker credentials

• Statement that the BOV is not an appraisal

How brokers build a BOV, step by step

Brokers build a BOV in eight steps: confirm the purpose, pull the property record, research ownership and debt, collect the income data, select and adjust comps, run the valuation approaches, set the pricing recommendation and package the report. The order matters, because the purpose decides how deep each later step needs to go.

1. Confirm the purpose and the audience

Start by asking who will read the BOV and what decision it supports. A listing pitch needs a defensible price and a sales plan, a lender's portfolio check needs a conservative value with every source cited, and an off-market outreach BOV may rely only on public records. State the intended use on the BOV, since some states require it.

2. Pull the property record

Gather the physical and legal facts: address and parcel number, asset type, building and lot size, year built, unit count and zoning. Note the county's assessed value, but treat it as context rather than evidence, because assessments rarely match what a buyer would pay.

3. Research ownership, sale and debt history

The ownership record explains the owner's position, which shapes both the pricing conversation and the chance of a deal. Use deed records and commercial mortgage data to find the last purchase price and date, the length of the hold, and the amount, lender and maturity date of recorded loans. An owner who bought a decade ago at a low basis has room to accept a market price, while one with a large loan maturing next year may not be able to sell below the payoff. If the property sits in an LLC, trace it to the decision-makers and review the owner's full property portfolio.

4. Collect the income and expense data

For income property, value comes from net operating income, so a BOV is only as good as the financials behind it. Ask the owner for the current rent roll, the leases, the trailing 12-month operating statement and recent capital spending. Check lease expirations, tenant concentration and below-market rents, then build a pro forma with stabilized NOI. If the owner has not shared numbers, estimate income from market rents and typical expense ratios, and say so in the report.

5. Select and adjust comparable sales

Comparable sales anchor the BOV in what buyers have actually paid. Choose commercial real estate comps that match the subject property on asset type, size, age, condition and submarket, and favor the most recent sales. Adjust each comp for its differences, such as a larger lot, a better location or weaker tenancy, and express the results in the unit buyers use for that asset: price per square foot for office, retail and industrial, and price per unit for multifamily. Active listings show the competition the property will face, and listings that expired without selling show where the market said no.

6. Run the valuation approaches and reconcile them

Most commercial BOVs rely on two approaches. The income approach divides stabilized NOI by a market capitalization rate (cap rate), the ratio of NOI to price that buyers are accepting for similar assets. The sales comparison approach applies adjusted comp pricing to the subject property. The cost approach, which adds land value to the cost of rebuilding and subtracts depreciation, is used mainly for new or special-purpose buildings. Weigh each approach by how reliable its inputs are, then reconcile the results into a value range. The guide to commercial real estate valuation approaches covers each method in more detail.

Take a hypothetical 24-unit apartment building with stabilized NOI of $310,000. At market cap rates of 6.0% to 6.5%, the income approach points to roughly $4.77 million to $5.17 million. If comparable sales trade at $195,000 to $215,000 per unit, the sales comparison approach gives $4.68 million to $5.16 million. A broker would reconcile these into a range of about $4.8 million to $5.1 million and explain which end of that range the building's condition and leases support.

7. Set the pricing recommendation

A value range is not yet a pricing strategy. Recommend a list price, describe the buyers most likely to pay it and outline the sales process. Keep the price within reach of the appraisal the buyer's lender will order later in the process of selling commercial real estate. Pricing high to win the listing backfires: the property sits, buyers read the time on market as a warning and the price comes down anyway.

8. Package and present the BOV

Lead with the conclusion, then present the evidence in the order a skeptical reader would test it: property, income, comps, approaches and reconciliation. Date the report, list the sources and assumptions, and state clearly that it is an opinion of value and not an appraisal.

How property data speeds up a BOV

Much of the time spent on a BOV goes into research: finding property facts, sale history, debt and comps, and working out who actually owns the building. A commercial property data platform puts those records in one place, so the broker spends time on the analysis and the pitch rather than on county websites.

Reonomy covers more than 54 million U.S. commercial properties, combining building and lot details, tax assessments, sales history, recorded mortgages with lender and maturity dates, and tenant information. Its machine learning links LLCs and holding companies to the people behind them, with contact details and a confidence score for each match, and any property profile can run a comps search filtered by location, size and sale date.

Rent rolls, leases and operating statements still come from the owner, so Reonomy does not replace the financials. It does remove the time spent on the public-record side of the BOV and adds the ownership and debt context that shows how motivated an owner may be. For prospecting, brokers can search for owners with long hold periods or loans maturing soon and lead with a value estimate built on records the owner will recognize.

Search more than 54 million U.S. commercial properties, pull sales and debt history, and see who owns each one. Request a free trial of Reonomy.