# Broker Opinion of Value Guidance

> **What this is:** A U.S.-focused guide to preparing seller-side broker opinions of value or pricing analyses for commercial investment sales.
> **How to use it:** Load this with the BOV skill, listing proposal skill, or OM / process strategy skills when you need a defensible pricing opinion that stays within brokerage boundaries.

This knowledge base is designed to help brokers produce a useful pricing recommendation while clearly distinguishing the work from an appraisal.

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## Core Rule

A broker opinion of value is a **broker pricing opinion**. It is not an appraisal.

The output should help the client decide:

- how to position the asset
- what pricing range to test
- what buyer process makes sense

It should not pretend to be a USPAP appraisal or legal valuation conclusion.

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## Minimum Disclosure Logic

At a minimum, include:

- subject property identification
- date prepared
- purpose and intended user
- contemplated or existing brokerage interest
- limiting conditions
- basis for the opinion, including market evidence
- a statement that the opinion is not an appraisal

If local law or brokerage policy requires stronger wording, use the stronger wording.

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## State-Law Warning

Some states are stricter than others about terminology and valuation boundaries.

Practical rule:

- if the jurisdiction is sensitive about use of the word `value`, use a carefully qualified pricing-analysis label and explicit disclaimer
- if uncertain, escalate to brokerage counsel or compliance

Do not rely on national custom alone when state guidance is stricter.

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## Method Selection by Asset Type

### Sales Comparison

Use when:

- recent relevant comps exist
- buyer behavior is strongly comp-driven
- the property type has an active transaction market

### Income / Cap Rate Framing

Use when:

- the asset is investment-grade or income-producing
- current or projected NOI is central to pricing
- cap-rate evidence is available

### Cost / Land / Replacement Logic

Use when:

- the asset is specialized
- income data is thin
- land and replacement context matter to pricing

Most commercial BOVs will use more than one lens.

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## What a Good BOV Should Say

A good seller-side BOV should answer:

- what is the likely value range?
- what pricing stance is recommended?
- what assumptions drive that recommendation?
- what buyer universe is most relevant?
- what sale process supports the pricing goal?

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## What a Good BOV Should Not Do

- claim to be an appraisal
- imply certainty where comps are thin
- ignore contemplated brokerage interest
- skip limiting conditions
- give legal or tax advice

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## Recommended Output Structure

1. Assignment context
2. Property summary
3. Market and comp overview
4. Valuation approaches used
5. Range and recommended pricing stance
6. Process recommendation
7. Limiting conditions and disclaimer

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## Practical Red Flags

- thin comp set
- stale financials
- unclear rent roll or lease profile
- seller insists on a number unsupported by evidence
- market volatility or legal constraints make the range unusually wide

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## Last Updated

Last updated: 2026-04-22

## Scope Limitations

- U.S. only
- seller-side brokerage pricing guidance
- not an appraisal manual

Validate current local legal requirements and brokerage compliance expectations before using any BOV format or terminology as a standard template.
