California Partition Law Blog
In determining the value of property, a property owner can seek out a broker’s opinion of value. A broker’s opinion of value, also caller a broker’s price opinion is an assessment of a property’s value. This assessment is done by a real estate broker, often for free to get the property owner’s business.
Broker’s Opinion of Value
A broker’s price opinion is often considered a personal opinion, not a representation of fact. So, it is a cost-effective way to determine value but cannot be relied on to get a loan. The price opinion covers anything that is an estimate prepared by a real estate broker, agent, or salesperson detailing the probable sales price of a price of property. The price opinion will provide a varying level of detail about the property’s condition, market, neighborhood, or comparable sales. (12 U.S.C. § 3355(b).) A broker’s price opinion will not include an automated valuation model. (12 U.S.C. § 3355(c).) An automated valuation model is a computer program that offers an estimated property value on searched properties commonly used on online real estate marketplaces. Federal statute dictates a broker’s price opinion cannot be used as the primary basis to determine a property’s value for originating a mortgage loan secured on a piece of property. (12 U.S.C. § 3355.) So, while a broker’s price opinion cannot be the basis for a loan, their opinion is still valuable. As such, brokers are held to a higher standard of care.