Which one do you need?
Appraisal, CMA or BPO
Three different documents that all end in a number. Only one of them is evidence.
| Appraisal | CMA | BPO | |
|---|---|---|---|
| Prepared by | Licensed or certified appraiser | Real estate licensee | Real estate licensee |
| Governed by | USPAP, and NJ Appraiser Board regulation | No valuation standard | No valuation standard |
| Independence certified | Yes, in writing and signed | No | No |
| Property inspected | Set by the scope of work and disclosed; interior on ours unless agreed otherwise | Varies; often exterior only | Often exterior only |
| Will a court or tax board receive it | Yes, though weight and admissibility are always theirs to decide | No | No |
| Meets IRS appraisal requirements | Written to, subject to IRS review of the value itself | No | No |
| Typical cost | A few hundred dollars | Usually free | Low, generally lender-ordered |
| Best used for | When somebody else must accept the number | Deciding a listing price | Lender portfolio and default work |
The distinction that matters
All three produce a number, and on an ordinary house in an active market the three numbers will often be close. That is not the point.
The difference is who will accept it. An appraisal is prepared under a professional standard by someone licensed by the state, who certifies their independence in writing and can be cross-examined on the analysis. A CMA and a BPO are opinions, offered without that standard behind them, usually by someone whose business is transactions.
So the question is never "which is most accurate". It is: does anyone other than me have to accept this figure? A tax board, a court, the IRS, the Division of Taxation, a mortgage servicer, or a sibling who disagrees with you.
When the free one is the right one
If you are pricing a three-bedroom colonial in a town with eleven similar sales in the last six months, and the only person who needs convincing is you, a good agent's CMA will do the job and cost you nothing. Paying several hundred dollars for a formal opinion in that situation is not a good trade and we will say so.
Where an appraisal earns its fee:
- Estate and date-of-death, where the IRS and the Division of Taxation are downstream
- Divorce, where the other side will read every adjustment
- Tax appeal, where a board applies a statutory test
- PMI removal, where a servicer sets the rules
- Gift reporting, where the value should stop being reopenable
FAQ
Common questions
Is a CMA ever good enough?
Frequently, and anyone who tells you otherwise is selling. If you are deciding what to list an ordinary house at, in a town with recent comparable sales, and nobody but you has to be persuaded of the number, a competent agent's comparative market analysis will serve you and it is usually free. An appraisal earns its fee when somebody else has to accept the figure.
Can a real estate agent give me an appraisal?
No. In New Jersey, developing and communicating an appraisal requires a state license or certification issued by the Real Estate Appraiser Board. A licensed agent may prepare a comparative market analysis and, in most cases, a broker price opinion, but neither is an appraisal and neither may be represented as one. That is a licensing line, not a marketing distinction.
Why is a BPO not much use in a contested matter?
Because a broker price opinion is not prepared under USPAP, carries no signed certification of independence, and its author is usually somebody whose business is transactions. None of that means it is dishonest. It means there is no professional standard behind it that an opposing party can test. Whether any document is admitted, and what weight it gets, is for the tribunal, and no appraiser can promise you either. What an appraisal gives you is something that can survive being tested; a BPO gives the other side nothing to cross-examine and you nothing to fall back on.
What about the estimate on a property website?
An automated valuation model is a statistical estimate produced without anyone looking at the property. It cannot see a renovated kitchen, an unpermitted addition, a failing roof, or the fact that the house backs onto a rail line. It is a useful starting point and it is not evidence of anything. No tax board, court or taxing authority will act on one.
Can you do both an appraisal and a CMA for me?
Not on the same property in the same transaction. Only one capacity is ever taken per matter. If a CMA is what serves you, that offer is made before any appraisal assignment is accepted, never after. An appraiser with a contingent interest in the sale price is not independent, and independence is the whole product.
Next step
Not sure which one you need?
Describe the situation. If a CMA would serve you, or if nothing formal is needed at all, you will hear that before anything is ordered.