Broker Price Opinion Gains Momentum
A tool known as Broker Price Opinion, or BPO, is gaining momentum among non-sellers. In a BPO, the estimated value of an asset and the sale price of a property are determined by a real estate broker as opposed to a property appraiser. I often employ this tool to help my clients price their properties correctly as they prepare to sell. However, I am increasingly receiving requests from owners who want and need to understand their equity position relative to other opportunities in light of extensive domestic and foreign changes. In other instances, owners need BPOs to take advantage of a tax amnesty in their country of origin. For example, Argentine investors are rushing to obtain BPOs to declare previously undisclosed assets in South Florida to meet a March 2017 deadline to qualify for a tax amnesty.
BPO gained popularity during the U.S. recession, when lenders were constantly repossessing assets and accessing BPOs in order to determine a property’s market value. While the Miami commercial real estate market remains healthy, BPOs are becoming the inexpensive preferred tool for monitoring the appreciation of income-producing properties and determining their market value as the real estate cycle evolves.