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Posted over 12 years ago

What's Your Home Worth?

What’s your home worth???  This is one question that has become more difficult for the typical home owner to answer in the current Central Ohio housing market.  Nowadays a lot of information circulates via the internet, so it is plausible to think that determining an accurate home value would be easier.  However, when confusing lingo such as BPO, CMA, and Appraisal are being tossed about, it makes it even more difficult for the typical home owner to decide where to begin.  Below is a breakdown of a few key differences when trying to decide which type of valuation to use.

CMA (Comparative Market Analysis) – CMA’s are typically provided by a real estate agent to aid a client in determining the value of their property and is a method that can vary greatly.  A typical CMA will provide comparable properties that are both “Active” and those that have recently sold.  A CMA may even include properties that have been recently withdrawn from the market or those that are currently under contract.  CMA’s are largely dependent on the performing agent’s business practices and can be very sparse with information or extremely detailed. 

BPO (Broker Price Opinion) – A BPO is an opinion on price provided by a licensed real estate agent or (broker) typically for a client which may be a third party vendor, lender, or other private party.  Informational guidelines are typically provided by the client prior to the agent rendering any type of opinion.  While a CMA may be just as accurate, a BPO is typically more rigid and has a clearer set of standards regardless of the client’s provided guidelines.  One might find examples of these standards on the National Association of Broker Price Opinion Professionals website. 

Appraisal – A professional real estate appraisal is an evaluation of a property that is provided by an Appraiser(s) who are trained individuals, specifically licensed to perform such evaluations on real property.   An appraiser may use a number of approaches when providing a value for a property (e.g. – cost approach, sales comparison approach, or income approach) whereas the sales comparison approach is the most common valuation approach used in a CMA or a BPO.  While evaluations from both Real Estate Agents and Appraisers are both considered professional opinions, an appraisal performed by a licensed appraiser is the only form of valuation accepted by most lending institutions in the United States.  Appraisals are also the most costly, ranging anywhere from $200-$500 for a residential appraisal. To view the Uniform Standards of Professional Appraisal Practice, visit:   .

For additional questions about valuations feel free to contact Greg Watson or visit our website. 


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