What a broker opinion of value (BOV) is, how a broker prepares one, how it differs from an appraisal and when to get one.
A broker opinion of value (BOV), also called a broker price opinion (BPO), is a report from a broker that estimates a property’s value and suggests a list price.
It is most useful before a sale. Lenders usually require a formal appraisal for a loan or refinance. Both rest on the methods in how commercial property is valued in Colorado.
This guide covers what goes into a BOV, how a broker builds the number, how it compares with an appraisal and an evaluation, what Colorado law says about broker valuations and how to judge the BOV you receive.
How a BOV Is Prepared
A broker and their team prepare a BOV in-house, using their market knowledge, sales data and local comparable sales.
In commercial practice, brokers start with a comparable market evaluation, which sets a defensible asking price.
The work usually follows these steps:
- Gather the property facts. Size, age, condition, zoning, parking and recent improvements.
- Collect the income records. Leases, the rent roll and a year or more of operating statements.
- Find comparable sales. Recent sales of similar buildings in the same or similar markets.
- Check current competition. Properties listed for sale now, and how long they have sat.
- Apply the valuation methods. Usually a sales comparison and, for leased buildings, an income approach.
- Reconcile to a price range. The broker weighs each method and suggests a list price.
The Methods Brokers Use
Brokers draw on the same approaches appraisers use, but in a lighter form.
- Sales comparison: Value from recent sales of similar properties, adjusted for differences such as location, size, age and date of sale. Only sold properties count as true comparables.
- Income approach: Net operating income divided by a capitalization rate. This is usually the main method for a leased investment property.
- Cost approach: Land value plus the depreciated cost of the building. It is most useful for newer or special-use buildings with few comparable sales.
The full mechanics are in the Colorado valuation guide linked above. For the income inputs, see the NOI figure behind the price.
A Worked Example
Here is how a broker might frame the income approach for a small leased building on the Western Slope. The NOI is an example; the cap rates come from RMCRE’s Mesa County reports.
| Input | Lower cap rate | Higher cap rate |
|---|---|---|
| Net operating income | $180,000 | $180,000 |
| Cap rate | 7.0% | 7.75% |
| Indicated value (NOI / cap rate) | About $2,571,000 | About $2,323,000 |
The Mesa County Q2 2026 report shows cap rates moving from 7.75% to 7.0% over the year. On the same income, that shift is worth about $248,000. A good BOV explains which cap rate it uses and why.
What a Commercial BOV Usually Contains
Formats vary by brokerage, but most commercial BOVs include:
- A summary of the property and its location
- The suggested price or price range
- Comparable sales, with notes on how each differs
- Competing listings currently on the market
- An income analysis based on the rent roll and expenses
- Local market data such as vacancy, rents and absorption
- Often, a marketing plan showing how the broker would sell the property
The rent roll is the most important document an owner can supply. See what a rent roll should show.
BOV vs Appraisal
A BOV is a broker’s estimate, while an appraisal is a formal valuation by a licensed third party who inspects the property.
| Feature | BOV | Appraisal |
|---|---|---|
| Prepared by | The broker | A licensed third-party appraiser |
| Inspection | Not required | A full site visit, including roofs and mechanical rooms |
| Cost | Often free for owners thinking of selling | At least $2,000, about $4,000 on average, and $10,000 to $25,000 for large properties |
| Used for | Pricing a sale | Loans and refinancing |
The deeper difference is independence. An appraiser has no stake in the sale. A broker who prepares a BOV often hopes to win the listing, so treat the number as an informed opinion, not a neutral finding.
Where an Evaluation Fits
Banks have a third option for smaller loans, called an evaluation. Under FDIC rules, an appraisal by a state-certified appraiser is required for commercial real estate transactions of more than $500,000. At $500,000 or less, the bank may instead obtain an evaluation.
Colorado law defines an evaluation as an opinion of market value made under the 2010 federal Interagency Appraisal and Evaluation Guidelines. It is given to a financial institution for a transaction that does not require an appraisal.
| Report | Who orders it | Main purpose | Standard |
|---|---|---|---|
| Broker opinion of value | The owner | Pricing a sale or testing value | Broker’s market judgment |
| Evaluation | A bank | Smaller loans that do not need an appraisal | Federal evaluation guidelines |
| Appraisal | A bank, court, estate or owner | Loans over the threshold, estates, disputes | Licensed appraiser standards |
What Colorado Law Says About Broker Valuations
Colorado regulates who may give a real estate appraisal. Its statute defines an appraisal broadly, as a written or oral analysis or opinion about the value of real estate.
The same statute excludes a licensed broker from the appraiser rules on two conditions. The broker’s opinion of value must not be represented as an appraisal. It also must not be used to obtain financing.
In practice, that means:
- A Colorado broker can prepare a BOV to help you price a sale.
- The BOV should not be labeled or presented as an appraisal.
- A BOV cannot stand in for an appraisal when you apply for a loan.
For a loan, refinance, estate or court matter, use a licensed or certified appraiser. Brokers can still help with the market data behind those decisions.
When to Get a BOV
Get a BOV when you are thinking about selling, or want a quick read on your property’s value.
A BOV gives you that insight with no obligation to sell. For a loan, refinance, estate or litigation matter, use a formal appraisal or valuation counseling instead. If a sale is likely, read how to sell commercial property in Colorado.
Common reasons owners ask for one:
- Deciding whether to sell. Compare the likely price with your loan balance and goals.
- Choosing a listing broker. Several BOVs show how each broker reads the market.
- Planning a 1031 exchange. Know what you can sell for before you look for a replacement; see exchange timing in Colorado.
- Checking your equity. A rough value shows how much room you have before you call a lender. Lenders will still order their own appraisal.
- Partner talks. A BOV can start a conversation about a buyout, though a formal appraisal usually settles it.
How to Judge the BOV You Receive
Not every BOV is equally useful. Look for these signs of a careful one.
- Real sold comparables. Listings show asking prices; sales show what buyers paid.
- Clear adjustments. The broker should explain why each comparable is better or worse than yours.
- A stated cap rate with support. It should match recent local sales of similar property.
- A range, not just one number. Markets are uncertain, and a range is more honest.
- A price the broker can defend. Be wary of a value far above the others you receive. A high number can win a listing and then sit unsold.
Mistakes Owners Make
- Picking the broker with the highest number. Overpricing often means a longer time on market and later price cuts.
- Withholding problems. Deferred maintenance or a weak tenant will surface in due diligence.
- Using an old BOV. Values move with rates and local sales, so refresh it before you list.
- Showing a BOV to a lender as an appraisal. Colorado law excludes that use.
BOVs in Colorado Mountain Towns
A BOV is only as good as the comparable sales behind it, and many Colorado mountain towns have few sales. RMCRE’s own market reports show how thin the data can be.
| Market and period | Commercial transactions | Cap rate reported |
|---|---|---|
| Pagosa Springs, Q2 2026 | 0 (3 in Q2 2025) | 6.3% to 7.2% |
| Montrose, Q2 2026 | 1 (5 in Q2 2025) | 8% (7% a year earlier) |
| Aspen, 2026 year to date | 18 (3 in 2025) | 4.5% to 6.0% |
| Mesa County, first half of 2026 | 87 (88 a year earlier) | 7.0% (7.75% a year earlier) |
When a town has one or two sales in a quarter, a broker must widen the search. That can mean older sales, nearby towns or a heavier reliance on the income approach. A good BOV says so and explains the adjustments.
Local knowledge matters most in these markets. A broker who works the town often knows about off-market sales, pending deals and lease terms that never reach a database. In resort towns, the broker should also account for how seasonal sales and lodging taxes affect the tenants’ ability to pay rent.
Frequently Asked Questions
Is a broker opinion of value the same as an appraisal?
No. A BOV is a broker’s estimate for pricing a sale. An appraisal is a formal valuation by a licensed appraiser, usually required for loans.
How much does a BOV cost?
It is often free for an owner who is thinking of selling. Brokers prepare it in the hope of winning the listing.
Can a BOV be used to get a loan in Colorado?
No. Colorado excludes brokers from appraiser rules only when their opinion is not used to obtain financing. Lenders order an appraisal, or an evaluation for smaller loans.
How accurate is a broker opinion of value?
It depends on the broker’s local knowledge and the comparable sales available. In small mountain towns with few sales, expect a wider range.
How long does a BOV take?
It is usually much faster than an appraisal because it needs no full inspection. Supplying the rent roll and operating statements early speeds it up.
Valuation Help From RMCRE
RMCRE members provide valuation counseling for refinancing, partnership buyouts, estate planning, litigation and insurance, built on local Colorado data. See RMCRE valuation counseling.
Rocky Mountain Commercial Real Estate has connected partner brokers across Colorado mountain towns since 2010. Our members publish market updates with local sales, cap rates and vacancy, the same data a careful BOV draws on. Find a broker in your town through the RMCRE broker team.
