During my pre-licensing class I always assumed that a “Broker Price Opinion” and a “Comparative Market Analysis” were the same thing. Every time I read the definition of a “Comparative Market Analysis” it would always say, “refer to broker price opinion” or vice versa. It was not until I took the test that I found out that there was a difference between the two – when a question specifically asked for the difference between the two.
The legal definitions of “Comparative Market Analysis” and “Broker Price Opinion” are the same; both state that they are:
“An estimate prepared by a licensed real estate broker that details the probable selling price or leasing price of a particular parcel of or interest in property and provides a varying level of detail about the properties condition, market, and neighborhood, and information on comparable properties.”
While the definition of a “Broker Price Opinion” is the exact same as a “Comparative Market Analysis, the differences lie in the history of the terms. During the 2007 real estate industry crisis, there was an increase of needed opinion of values for distressed properties requested by lien holders. Lien holders did not want to pay for an appraisal for the property, so they got the next best thing, which was a “Broker Price Opinion.” This enticed real estate brokers to start performing “Broker Price Opinions” for fees because they knew they would be able to get some money out of there pricing expertise. A “Comparable Market Analysis” could be done for a fee too, but they were done for selling or buying clients and a broker price opinion is more concise and formal.
So what is the difference between a “ Comparative Market Analysis” and a “Broker Price Opinion?”
“Broker Price Opinions” are used by 3rd party non brokerage clients who do not want to go through the process of an appraisal, but need a professional opinion on the price of a property. While a “Comparative Market Analysis”, both the seller and buyer clients use analysis to guide a probable same price decisions.