Broker price opinions are a popular method for estimating real estate value, performed by real estate brokers or licensed individuals. It is often requested to evaluate the property’s value before a sale or when securing a new loan. However, the comparative market analysis conducted is intended to be an unbiased estimate of the market value of a real estate by a real estate licensee who is not certified as an appraiser. Indeed, a licensed appraiser’s approach and valuation techniques are not different from that of a broker price opinion.
Broker price opinion is believed to be more all-inclusive compared to that of an Automated Value Model, which calculates a real estate value without necessarily visiting the property. Considering all that was used, including historical price, market condition, and comparables, the motivation behind the opinion may differ from the one behind an appraisal.
Furthermore, it is quite expedient to note that state rules guide broker price opinion and vary. In Massachusetts, for instance, Broker price opinions may be performed by real estate brokers and salespeople. However, they do not necessarily charge a fee for their services.
Lenders use Broker price opinions’ estimates of the real estate value, especially when there is a need for a short sale offer. These opinions are written down and delivered to the Lender. Then, short sales occur when a homeowner owes more on their mortgage than the price at which the property will be sold. The broker price opinion can be used to determine whether or not the specific short sale offer is reasonable. The Broker will take photos, examine comparable, estimate repair costs, and deliver their opinion.
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