Broker price opinion

Key Takeaways

• A broker price opinion is a licensee's report on what a property is probably worth, and Washington law lets it be delivered orally or in writing.
• Washington's appraiser act treats a comparative market analysis and a broker price opinion as the same product, so the two labels describe one thing.
• A broker price opinion is not an appraisal unless it also meets the certified appraiser requirements in chapter 18.140 RCW.
• A Washington firm may be paid for a broker price opinion even when it has no services agreement with the person who ordered it.

What It Means

A broker price opinion is a licensed real estate professional's report on what a property is probably worth. Washington's license law counts issuing one as a real estate brokerage service, which means only a licensee may prepare one for someone else. It may be delivered orally or in writing, and it is built the way a broker builds any pricing recommendation: by studying recent Comparables and adjusting for condition, location, and timing.

The word students trip on is appraisal. A broker price opinion is not an Appraisal under Washington law unless it also satisfies the certified appraiser act, and that sentence carries weight. A lender that needs an appraisal for underwriting cannot swap in a broker's opinion of value, which is one reason a deal can stall even when the broker's number was sound. Our guide to low appraisals walks through what happens next. Washington also defines a Comparative Market Analysis as a broker price opinion, so a broker who prices a listing for a seller has produced one whether or not the paperwork uses that name.

How It Works in Washington

Three Washington rules govern this work. RCW 18.85.011 defines a broker's price opinion as an oral or written report of property value prepared by a licensee, and says it is not an appraisal as defined in RCW 18.140.010 unless it complies with the requirements established under chapter 18.140 RCW. RCW 18.140.010 then defines a comparative market analysis as a broker's price opinion, collapsing the two terms into one. And RCW 18.86.080(9) lets a firm receive compensation without a services agreement for providing a broker's price opinion, or for a referral to another firm when the referring firm provided no brokerage services in the transaction. Licensing for all of this sits with the Washington State Department of Licensing.

Recordkeeping is the piece brokers forget. WAC 308-124C-105 requires the transaction folder to hold all agreements, receipts, contracts, documents, leases, closing statements, broker price opinions, referral agreements, and material correspondence. The opinion you emailed on Friday belongs in the Transaction File on Monday. Our record-keeping guide covers the rest of the folder.

Example

Maria Ortega, a broker at Cascade Ridge Realty in Spokane, gets a call from a credit union that wants a value opinion on a duplex at 412 Ash Street before it renews a line of credit. Maria pulls three sold duplexes within a mile, adjusts for the newer roof and the smaller lot, and delivers a written opinion of $486,000 with a $250 invoice. She signs no services agreement with the credit union and needs none, because RCW 18.86.080(9) allows a firm to be compensated for a broker price opinion without one. Her report says on its face that it is a broker price opinion and not an appraisal. Two weeks later the credit union orders a full appraisal anyway, and it comes in at $479,000. Maria's opinion was not wrong. It was simply not the product the underwriter was required to use. She files a copy in the firm's transaction records the same day.

Common Mistakes and Exam Traps

• A broker price opinion and a comparative market analysis are the same product under Washington's appraiser act, so an answer treating them as two different valuation methods is wrong.
• A broker price opinion does not turn into an appraisal because it is long, detailed, or paid for. It becomes an appraisal only if it meets the certified appraiser requirements.
• The compensation exception is narrow. It covers a broker price opinion and a qualifying referral, not the brokerage services the firm performs if it goes on to list the property.