Broker Opinion of Value vs. Appraisal: Which Do You Need to Sell?

Key Takeaways

A Broker Opinion of Value (BOV) is a broker’s estimate of what your building would likely sell for. An appraisal is a formal valuation by a licensed appraiser, usually ordered by a lender. They serve different purposes.

A BOV helps you decide whether and when to sell and what to list for. An appraisal comes up later, when a buyer’s lender needs one to approve a loan.

Most sellers need a BOV first, and they usually do not need to order an appraisal at all.

What a Broker Opinion of Value Is

A BOV is prepared by a real estate broker who works in your market. It looks at your building’s actual rents and expenses, its condition and unit mix, and recent comparable sales, and arrives at a likely sale price or price range. It also reflects things a formal report may not, such as which buyers are active right now and how they are pricing buildings like yours.

A BOV is not a formal appraisal, and it is not a guarantee of what a buyer will pay. It is a professional opinion, grounded in the market, about where your building is likely to sell.

What an Appraisal Is

An appraisal is a formal, written opinion of a property’s market value prepared by a licensed or certified appraiser who follows professional standards. Lenders require one before they make a loan, so the buyer’s lender will order an appraisal of your building during escrow. The appraiser works for the lender, not for you.

Owners also use appraisals in situations that call for a formal valuation, such as an estate, a partnership buyout, or a dispute.

The Main Differences

Who prepares it. A broker prepares a BOV. A licensed appraiser prepares an appraisal.

Why it exists. A BOV helps you price and market a sale. An appraisal supports a loan or another formal need.

What it costs. Brokers typically provide a BOV at no charge when you are considering a sale, while an appraisal is paid for, usually by whoever needs it.

How it is used. A BOV is a planning and pricing tool with no formal standing. An appraisal is the document lenders and other institutions rely on.

Which One Do You Need Before Selling?

If you are deciding whether to sell or setting your asking price, you want a BOV. It is faster, it costs you nothing from a broker, and it is built around how buyers are actually pricing buildings right now. You do not need an appraisal to list a building.

If you need a formal valuation for a reason other than a typical sale, such as an estate or a legal dispute, ask your attorney or CPA whether an appraisal is required.

Why the Buyer’s Appraisal Still Matters to Your Sale

Even though you do not order it, the buyer’s lender will. If the appraiser values the building below the agreed price, the buyer may have to bring more cash, ask for a lower price, or walk away if their agreement allows it. That is why a well-supported price at the start matters: a price backed by real comparable sales is more likely to hold up when the appraiser checks it.

A BOV that uses recent sales and your actual rent roll helps you set that price. We use the same kind of neighborhood sales data that appears in our article on LA apartment cap rates and prices by neighborhood.

What to Expect From Our BOV

Our Broker Opinion of Value is free and confidential, and it is grounded in your building’s actual rents, condition, and unit mix. We will walk you through how your rents, tenants, and timeline affect the price, so you understand the number and not just the total. To see how buyers think about value, read our guide on how to value an LA apartment building.

You can start with the free property value calculator for a quick range, then request a Broker Opinion of Value when you want a number you can plan around. This article is general information, not legal, tax, or appraisal advice.