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Determining property value is a crucial step in real estate. Irrespective of whether you are buying, selling, or refinancing, the correct value must be known to make informed decisions.
Broker Price Opinion (BPO)
A real estate agent or broker performs this valuation. BPOs are much faster and less expensive as compared to appraisals. They are a popular choice for banks and lenders. However, BPOs are also less detailed and accurate than CMAs and appraisals as they solely rely on the real estate professional.
Comparative Market Analysis (CMA)
CMAs analyze the recent sales of similar properties within that area. Real estate agents prepare them. Although more detailed than BPOs, CMAs are less comprehensive than appraisals. Agents commonly use them to help sellers set listing prices. Buyers use CMAs to make informed offers.
Licensed appraisers conduct appraisals. They are one of the most accurate and thorough valuation methods. Appraisals involve a detailed inspection of the property and an analysis of comparable sales. They adhere to strict appraisal standards—lenders in mortgage transactions often commission appraisals.
In summary, while BPOs, CMAs, and appraisals all aim to estimate property values, they differ in terms of accuracy, depth, and purpose. The choice between these methods depends on your specific real estate needs and goals.