Valuation/BVO

PROPERTY ANALYSIS AND VALUATION

It currently seems to be Very Trendy in the Commercial REO Market Place and Associated Services to Refer to a Commercial BPO (Broker Price Opinion) as a Broker Opinion of Value(BOV) or Commercial Broker Opinion of Value (CBOV) instead of Just a Commercial BPO as opposed to a Residential BPO.  One Reason may be that the acronym ‘BPO’ is most often associated With Residential Real Estate. It may also be a desire to separate association between the two because Commercial Property Evaluation by nature is more complex and may reference Income, Future Income, NOI, GRM, CAP Rates and other information not used in the Value Estimates of Residential Properties. One or more of these Kinds of Data are often included and used in the Valuation Estimate of an Appropriate  Commercial Property.  Most Residential BPO’s rely on Comparable Sale and Listing Information as the Basis for Value Estimates.  In any event REO-PRO Commercial is going to refer to our  Commercial Evaluation Reports as BVO‘s (Broker Valuation Opinion).

The Analysis of any Commercial Property Using one or more of these Approaches that are based on an Income Stream is usually a much more In Depth Analysis then that used for a Residential BPO and  may be one Reason why there is so much effort made to use the Different Terminology.  The Biggest Reason for all types of Broker Evaluations to be referenced with Broker may be pressure from Government Agencies and The Appraisal Industry to make sure that the Value Estimates made by Brokers are not represented to the Public as being the same Product as an Appraisal Made by a Licensed Appraiser.

Many Times Income Information is not Available or Requested for a Bank Owned Commercial Property or some other Approach is Requested or needed to be referenced such as prevailing Lease Rates in a certain Area or an appropriate Cap Rate.  Often only a Price Comparison Based on Price per Square Foot or some other Common Denominator is requested or is available but even these approaches may have and probably will have strong ties to some type of Income Stream.

We specialize in providing current and reliable Broker Property Analysis and Evaluation for Bank Owned Commercial Properties.  As Experienced Commercial Brokers we believe that in addition to Comparable Sales, sometimes it is necessary to provide other Individual Property Evaluation methods in addition to possibly inadequate Criteria of only Comparable Sales and Listings.  While practical and convenient for Residential use, Comparable Sales only is often not accurate or reliable for Bank Owned or Distressed Commercial Properties.  We believe this flexible Approach to Commercial Property Evaluation may be a much better and possibly a more accurate and reliable method of Estimating Current Market Value and certainly a more desirable alternative to a very Costly Commercial Appraisal From a Licensed Real Estate Appraiser.

 

Chic R. Williams-REO-PRO Commercial, LLC
Direct/Cell: 720-300-7745  Office: 303-980-5715
3609 S. Wadsworth Blvd. Ste 125
Lakewood, Colorado 80235
chicwilliams@reo-pro.com

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