Property Valuation
In Virginia, a broker price opinion (BPO) differs from a formal appraisal in that:
AA BPO is always more accurate than an appraisal
BA BPO is prepared by a licensed real estate agent and not a certified appraiser; it is not a USPAP-compliant appraisal✓ Correct
CA BPO is required for all FHA loans
DA BPO may only be used for commercial properties
Explanation
A BPO is a value estimate prepared by a licensed real estate agent (not a certified appraiser) and does not comply with USPAP. It is used for limited purposes (e.
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Key Terms to Know
Appraisal
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Math Concepts
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