Comparative market analysis and broker price opinions

Pricing advice and appraisal

A comparative market analysis, or CMA, compares a subject property with competing and recently sold properties to help a seller choose an asking price or a buyer evaluate an offer. A broker price opinion, or BPO, communicates a real estate licensee's opinion of probable selling price, often in a requested report format for an owner or an asset manager. Their methods can overlap; neither label turns brokerage pricing advice into an appraisal.

Build the comparison

Start with the property, the purpose, and the date of the opinion. Select properties that compete for similar buyers: consider location, property type, size, condition, amenities, and recent market conditions. Recent comparable closed sales show prices buyers actually paid. Active listings show current competition and asking prices, not achieved sale prices. Pending listings can indicate demand, but their final prices may be unknown. Expired or withdrawn listings can help diagnose unsuccessful pricing or marketing, but do not by themselves prove value.

Compare differences rather than merely averaging prices. Adjust a comparable toward the subject: subtract for a comparable's superior feature and add for its inferior feature, using supported market contributions rather than assuming cost equals value. For example, a comparable sold for $320,000 and has a garage worth $15,000 more in this market than the subject's parking arrangement. Its indicated price for the subject is $305,000: $320,000 minus $15,000. Reconcile the strongest evidence into a supported opinion or range; do not give a distant, dissimilar sale equal weight just because its price is attractive.

Florida's boundary

Florida permits licensed brokers, sales associates, and broker associates to provide valuation services for compensation without holding an appraiser credential, provided they do not represent themselves as certified, licensed, or registered appraisers. An ordinary-course CMA, price opinion, or opinion of value must not be referred to or construed as an appraisal. Charging a fee does not create an appraiser credential, and a detailed report does not erase that distinction.

Present the purpose, relevant evidence, reasoning, and limitations clearly. A pricing opinion is not a guarantee of the eventual sale price, and a CMA or BPO cannot substitute where an appraisal is required. Identify the intended use before accepting an assignment.