Broker price opinions are estimates on the current value of a piece of real estate. Typically, a real estate broker or some other qualified professional that is connected with a real estate firm conducts the opinion. Also known as a comparative market analysis, a broker price opinion will consider a number of different aspects of the property in order to develop this type of property value estimate, including location, projected trends in the local market, and any amenities found on the property.
The purpose of a broker price opinion is to provide the seller with the data necessary to set the selling price at a figure that is reasonable and likely to attract attention from potential buyers. Some sellers may choose to use the opinion instead of a property appraisal, although it is not unusual for both tools to be utilized when determining a sale price. While both approaches consider some of the same factors, an appraisal and a broker price opinion are not determined in the same manner, which means each approach can provide information that the seller will find helpful.
Along with homeowners who are selling their property, lenders who have repossessed properties due to mortgage defaults also make use of the broker price opinion. The opinion is helpful in identifying the price range that the property could command if sold as is, as well as what impact making a few improvements to the property would create in terms of a higher asking price. From this perspective, the opinion allows the lender to maximize the revenue earned on the property and increases the possibility of covering the entire defaulted amount, plus recouping any expenses associated with the foreclosure and ultimate maintenance of the property in the interim.
There are a number of factors that are considered as part of a broker price opinion. The broker will begin with considering the property itself, paying close attention to the general condition of all buildings, as well as their size and any amenities that are present in the interior sections. Often, the condition of the grounds is also important, as is the outward appearance of the buildings. From there, the condition of the surrounding neighborhood is also taken into consideration, including the presence of nearby commercial and residential areas. Market values for surrounding properties are also considered, taking into account any current sales trends for the immediate area.
The broker price opinion will provide an idea of what the property is worth if sold as is. At the same time, the opinion is likely to include suggestions for making minor improvements that would increase the value and influence the sale price. For example, if a broker believes that painting the building exteriors or replacing worn floor tiles would significantly increase the market price, that type of data is noted in the opinion.
