In Alaska real estate practice, a broker price opinion (BPO) differs from an appraisal primarily because:
Why A BPO is prepared by a licensed broker or salesperson and is not a formal appraisal meeting USPAP standards Is Correct
Answer B: A BPO is prepared by a licensed broker or salesperson and is not a formal appraisal meeting USPAP standards
Exam Tip: Property Valuation
Valuation questions focus on the three approaches to value: sales comparison, cost, and income. Know which approach is best for which property type. The income approach uses cap rate and NOI — memorize these formulas.
Key Property Valuation Terms in This Question
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Key Terms to Know
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
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