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What Is a Broker Opinion of Value (BOV) in Commercial Real Estate?
A commercial broker opinion of value (BOV), also known as a broker price opinion or property valuation, is an estimate of how much your commercial property is worth and what you could rent or sell it for under current and near-term market conditions.
Getting a BOV gives commercial property owners a wealth of information, helping them make better financial decisions.
While useful, a broker opinion of value is subjective. The output varies widely, depending on who prepares the document.
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Dozens of factors influence commercial real estate (CRE) value, including the location, property type, and market conditions. For example, rising interest rates are currently impacting the CRE market.
To give you reliable information, a commercial real estate broker must consider several aspects and know the market inside out.
The Differences Between an Appraisal and a Broker Opinion of Value (BOV)
An appraisal is a formal assessment. It follows strict guidelines and is often required for loans or property sales. Appraisers must adhere to a specific code. A broker opinion of value is an informal estimate of a property’s value. It offers a cost-effective way to gauge value.
Property Appraisal
- Formal assessment
- Conducted by a certified appraiser
- Often required for loans or property sales
- Expensive ($5,000 to $25,000)
- Takes 3 to 6 weeks
Broker Opinion of Value
- Informal estimate
- Conducted by a real estate broker
- Not official for loans or sales but frequently requested by owners
- Cost-effective (often free)
- Faster
Who Is a Commercial Broker Opinion of Value for?
With decades of combined experience in selling and leasing industrial and commercial real estate in Los Angeles County, our team can accurately valuate your property for free, empowering you to make better financial decisions.
From our experience, here’s who can benefit from getting a commercial broker’s opinion of value:
Selling or Leasing
Property owners looking to assess the current market value of their commercial properties for potential sale or lease.
Gauging Potential
Property owners looking to gauge the selling potential of their commercial properties in the current market.
Divesting
Investors interested in divesting from a commercial property.
Alex Matevosian
If you’re looking to sell or divest from your industrial or commercial property in Los Angeles County, we can help. Enter your property address in the form above or give us a call at 818.482.3830 for a free broker opinion of value.
What Are the Benefits of a Broker Opinion of Value in Commercial Real Estate?
The benefits of obtaining a broker’s opinion of value from an experienced commercial real estate broker include:
- Getting a market-based valuation enables you to make informed financial decisions for financial planning, tax purposes, and more
- Maximizing returns on your commercial property
- Gaining leverage in negotiation and property marketing
- Reassuring tenants and buyers since a credible, professional broker does it
Looking for a Commercial Broker Opinion of Value in Los Angeles County?
Alex Matevosian and the team at MIG Commercial Real Estate Services leverage their broad experience in Los Angeles County to provide you with exceptionally accurate property valuations.
Get a free broker opinion of value by typing your commercial property address onto our valuation form.
Alternatively, you can reach us via our contact form, email us at [email protected], or call 818.482.3830.
What Makes Our BOV Reports Different?
- Accurate and comprehensive commercial property valuation
- A report that’s backed by the latest market trends and analytics
- An accurate reflection of the true worth of your property
What to Look for in a Broker Opinion of Value
Besides obvious elements, such as the property address, type, and size, valuation date, and estimated property value, you should look for the following on a BOV (Broker Opinion of Value) document:
- An overview of current local market conditions, including supply and demand trends, vacancy rates, and economic factors that may affect property values.
- A clear explanation of the valuation approach used, whether it’s the income approach, sales comparison approach, or cost approach.
- Relevant and recent comparable property sales data that supports the property’s valuation.
- The credentials of the commercial real estate broker who conducted the valuation.
In addition, some BOV documents include recommendations for pricing strategies, such as listing at a certain price for sale or setting lease rates.
Broker Opinion of Value in Commercial Real Estate
The most common reason for using a broker price opinion, or broker opinion of value, is to determine a property’s current market value, often for pricing it for sale or lease.
Whether a broker opinion of value is better than an appraisal depends on the situation and requirements.
While an appraisal is often required for loans and property sales, a BOV offers a quick and inexpensive estimate of your property’s value.
The accuracy of a BOV can vary based on the broker’s expertise and the quality of data and analysis. Working with a commercial real estate broker with local expertise is crucial to get an accurate property valuation.
A broker opinion of value is carried out by a commercial real estate broker who assesses the property’s value by analysing market data, comparable sales, income potential, and other relevant factors to provide you with an estimate of its current market value.
The income approach and the sales approach are equally common commercial real estate valuation approaches.
While the income approach considers a property’s potential income and risk to determine its value, the sales approach analyses comparable sales in the market to determine a fair and competitive price.
A broker opinion of value is typically good for a few months. However, the validity period of a BOV depends on market conditions and property dynamics.
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