AT-A-GLANCE DEFINITIONS COMPARATIVE MARKET ANALYSIS: An examination of the prices at which similar properties in the same area recently sold. Real estate agents performa comparative market analysis for their clients to help themdetermine a price to list when selling a home or a price to offer when buying a home. BROKER’S PRICE OPINION: A broker’s price opinion is the process used by a hired sales agent to determine the potential selling price or estimated value of a real estate property. A BPO is popularly used in situations where a financial institution believes the expense and delay of an appraisal is unnecessary. COST APPROACH: A real estate valuation method that surmises that the price a buyer should pay for a piece of property should equal the cost to build an equivalent building. In cost approach appraisal, the market price for the property is equal to the cost of land plus cost of construction, less depreciation. PROFESSIONAL APPRAISAL: The Uniform Standards of Professional Appraisal Practice (USPAP) is the generally recognized ethical and performance standards for the appraisal profession in the United States. Compliance is required for state-licensed and state-certified appraisers involved in federally-related real estate transactions.
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