CRE 101 · deweyluong.realtor

Broker Opinion of Value (BOV) vs Appraisal Explained: What a Georgia Commercial Property Is Worth, and Which Number to Trust

Two professionals can look at the same building and give you two different numbers — and both can be doing their jobs correctly. By Túy “Dewey” Luong, CCIM — Founding Broker, SERHANT. Atlanta · 318 closed sales / $281.2M career volume · 678-707-2498

Every hold, sell, refinance and partner-buyout decision starts with one question: what is it worth? Georgia owners usually meet two different answers — a broker's opinion of value (BOV) and a licensed appraiser's appraisal. They are not interchangeable, they are not priced the same, and using the wrong one at the wrong step costs either money or months. This page explains what each document actually is, what a defensible BOV contains, and the single check that separates an analysis from a marketing number. It pairs with cap rate and NOI, the math underneath both documents.

The two documents, side by side

• Who prepares it: a BOV comes from a commercial real estate broker who sells buildings like yours in your submarket. An appraisal comes from a Georgia-licensed or certified appraiser who does not sell the property and has no stake in the outcome.
• The legal line in Georgia: a licensee may offer an opinion of value in the ordinary course of brokerage, but may not call it an appraisal. Appraisals are regulated under USPAP and the Georgia Real Estate Appraisers Board. A broker who labels a BOV an appraisal is breaking the rule, not upgrading the document.
• What it is built on: both use comparable sales and, for income property, the income approach. A BOV leans on the broker's live read of buyer demand, off-market activity and lease-up reality. An appraisal documents three approaches (sales comparison, income, cost) to a regulated standard, with a defined scope of work.
• Speed and cost: a serious BOV is typically delivered in days and is often prepared at no charge to an owner considering a sale. A commercial appraisal typically takes weeks and costs thousands of dollars, paid whether or not the deal closes.
• Who can rely on it: a BOV guides the owner's own decisions. An appraisal is what a lender orders for a loan, and what tax proceedings, estates and courts rely on. No lender will fund on a BOV.

What a good BOV contains — and what a weak one hides

• In-place income, stated plainly: the rent roll as it exists today, with vacant space shown as vacant. If projected income is used, it is labeled pro forma, with the lease-up assumptions written out.
• A cap rate with a source: the rate is tied to actual recent sales of similar Georgia properties, not a national average pulled from a headline.
• Comparable sales you can verify: addresses, dates, sizes and prices for the sales that support the range — typically three to five — including the ones that argue for a lower number.
• A range and a pricing strategy, not just a number: what the property likely trades for, and separately, where to list it to create competition. Those are two different figures and a good BOV says so.
• The weaknesses section: deferred roof work, a tenant rolling soon, a billboard or lease complication — anything a buyer's due diligence will find anyway. A BOV that lists no weaknesses is a pitch, not an opinion.

Worked example. The numbers below are made up to teach the mechanics. This is not a real property or a valuation.

• A made-up Gwinnett retail center shows a broker packet claiming $372,000 of NOI and a value near $5.9 million at a 6.3% cap rate. Reading the rent roll, $134,000 of that NOI comes from a vacant suite priced at asking rent — income nobody is paying.
• In-place NOI is therefore about $238,000. At cap rates from actual comparable sales (6.75% to 7.25%), the income approach supports roughly $3.3 million to $3.5 million — before any credit for leasing the vacancy, which a buyer will price as future work, not present income.
• Move the same in-place NOI by half a cap point and the value swings by roughly $250,000. That sensitivity is why the cap rate and the income definition matter more than the headline number.
• The lesson: never argue about the value conclusion until you have agreed on the two inputs — real NOI, and a cap rate from real sales. Get those right and any honest method lands in the same neighborhood.

Which one do you need, by decision

• Thinking about selling: start with a BOV. It prices the listing, tests whether the market supports your target, and costs you nothing but a meeting.
• Buying with a loan, or refinancing: the lender orders its own appraisal; your BOV still helps you decide what to offer and walk away from, but it does not replace the lender's document.
• Partner, family or estate questions: a BOV starts the conversation honestly; a formal appraisal is usually what finally settles it, because everyone can rely on the same independent number.
• Tax appeal or litigation: appraisal territory. Bring the BOV's comparable sales as homework, not as evidence.

Cho chủ sở hữu người Việt

Nhiều chủ sở hữu người Việt tại Gwinnett nhận được một con số giá trị từ môi giới và nghĩ rằng đó là thẩm định giá chính thức. Hai văn bản này khác nhau: BOV là ý kiến giá trị của môi giới dựa trên giao dịch thực tế và thu nhập đang có của tài sản, giúp chủ sở hữu quyết định nên bán, giữ hay niêm yết ở mức nào. Appraisal là thẩm định giá do thẩm định viên có giấy phép của Georgia lập theo chuẩn USPAP; ngân hàng cho vay, tòa án và cơ quan thuế chỉ dựa vào appraisal. Điều cần kiểm tra đầu tiên trong mọi định giá là dòng NOI: đó phải là thu nhập từ người thuê đang trả tiền thật, không phải con số dự phóng khi mặt bằng trống được lấp đầy theo giá chào thuê. Chỉ riêng khác biệt này có thể làm giá trị thay đổi hơn một phần ba.

Quy trình hợp lý cho hầu hết chủ sở hữu: bắt đầu bằng BOV để có khoảng giá trung thực và chiến lược niêm yết, và chỉ chi tiền cho appraisal khi giao dịch, khoản vay hoặc thủ tục pháp lý thực sự cần đến nó. Đây là thông tin giáo dục chung, không phải tư vấn pháp lý, thuế hay tài chính.

Frequently asked questions

What is a Broker Opinion of Value (BOV), in plain English?

A BOV is a commercial broker's written estimate of what a property would likely sell for today. It is built from comparable sales, the property's actual income (rent roll and in-place NOI), and a market cap rate, and it usually lands on a pricing range rather than a single number. A good BOV shows its work: which income figure was used, which cap rate, and which sales support the conclusion, so an owner can stress-test it instead of just trusting it.

Is a BOV the same as an appraisal in Georgia?

No. Under Georgia law a real estate licensee may give an opinion of value in the ordinary course of brokerage, but may not call it an appraisal; only a licensed or certified appraiser, regulated by the Georgia Real Estate Appraisers Board, can prepare an appraisal. An appraisal follows USPAP standards, is ordered independently (a lender orders its own), and is the document a loan, tax proceeding or court can rely on. A BOV is a strategy document for pricing and hold/sell decisions; it cannot be used to get a loan.

When is a BOV enough, and when do I need an appraisal?

A BOV is enough when the decision is yours: whether to sell, how to price, whether to hold and refinance later, or how to start a partner or family conversation about value. You need a formal appraisal when a third party must rely on the number: a lender financing a purchase or refinance, many tax appeals and estate settlements, partnership dissolutions headed to court, and financial reporting. Owners often get a BOV first, then pay for an appraisal only if the deal moves forward.

What should I check first in any BOV or valuation someone hands me?

Check the income line before the value line. Ask whether the NOI is in-place (tenants actually signed and paying) or pro forma (vacant space filled at asking rents in someone's model). Pro forma income at a market cap rate can overstate value by a third or more. Then move the cap rate: on the same NOI, half a point of cap rate swings value by hundreds of thousands of dollars on a mid-size Georgia property. If a valuation does not show its NOI and cap rate, it is a marketing number, not an analysis.

Định giá của môi giới (BOV) khác thẩm định giá (appraisal) như thế nào?

BOV là văn bản ước tính giá trị thị trường do môi giới bất động sản thương mại lập, dựa trên các giao dịch tương đương, thu nhập thực tế của tài sản (NOI đang có) và tỷ suất vốn hóa (cap rate) của thị trường; kết quả thường là một khoảng giá để chủ sở hữu quyết định bán, giữ hay định giá niêm yết. Theo luật Georgia, môi giới được phép đưa ra ý kiến về giá trị trong hoạt động môi giới thông thường nhưng không được gọi đó là thẩm định giá; chỉ thẩm định viên có giấy phép của tiểu bang mới được lập appraisal theo chuẩn USPAP, và ngân hàng, tòa án hay cơ quan thuế chỉ chấp nhận appraisal. Điểm quan trọng nhất khi đọc bất kỳ định giá nào: kiểm tra NOI là thu nhập đang có thật hay chỉ là con số dự phóng khi lấp đầy mặt bằng trống. Đây là thông tin giáo dục chung, không phải tư vấn pháp lý hay tài chính.

This page is general education, not an appraisal, a valuation of any specific property, or legal, tax or financial advice. A Broker Opinion of Value is an opinion for pricing and strategy discussions; only a Georgia-licensed appraiser can prepare an appraisal, and lenders and courts rely on appraisals, not BOVs. Túy “Dewey” Luong, CCIM is a real estate broker, not a licensed appraiser.