Appraisals, CMAs & BPOs

Although appraisals, CMAs- comparative market analysis, and BPOs- broker’s price opinion all serve the same purpose; which is to determine value, they are not to be confused with one another or used interchangeably.

An appraisal is a written assessment of a property’s fair market value. It is ordered by the buyer’s lender to ensure that the home is worth the amount they are lending the buyer to finance it.

A CMA is a written report of recently sold homes that are the same or similar, and in the same area as the property in question. Provided by real estate professionals; these reports are helpful to both buyers and sellers. When making an offer, a CMA can help buyers determine how much to offer on a home.  When selling a home, a CMA is an important part of the equation and is imperative when determining an accurate list price.

A BPO is usually requested by banks and lenders to determine the current value of a property.

BPOs are used in the following situations:

  • refinance of a mortgage
  • to cross reference an appraisal
  • home equity line of credit
  • bank owned properties
  • short sale and foreclosure properties

In instances where the cost and delay of a formal appraisal is not ideal, banks and asset managers rely on real estate professionals and hire them to perform BPOs. Private and hard money lenders also use BPOs to verify the current and after repair value of a property that may be held as collateral in an investor or ‘private money’ loan.

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