Encyclopedia
Opinion of value
An estimate of value from a licensee or other professional that isn't a formal appraisal.
For example: An owner asks for an opinion of value before deciding whether to sell. (Illustration only, not a real deal.)
Official source: Real Estate Services Rules (BC Laws)
Example only, not a real client. Say you are thinking about selling your warehouse. I prepare an opinion of value using recent sales and leasing data, so you know a realistic range before you decide whether to list.
What I’d tell a friend
An opinion of value gives you a starting point. For financing or legal purposes, you may need a formal appraisal.
Why it matters to you
It's fine for deciding whether to sell or refinance, but lenders, courts and tax authorities may not accept it. If a formal value will be needed later, for a loan, an estate or a dispute, budget for an appraisal.
How to use it in your deal
Owners should ask each licensee to show their work: comparable sales and leases, adjustments, and the assumptions on income and cap rates. Be cautious of the highest number if it isn't supported. Use it for planning, not for lending, tax or legal purposes; those usually need a formal appraisal from a qualified appraiser.
Buyers can ask how a list price was set, but shouldn't rely on the seller's opinion. Lenders won't accept it. Executors and family members dividing an estate should also use an appraisal rather than an opinion if values could be disputed. BC rules expect licensees to be competent and not to mislead clients about value. Ask for the comps behind it in writing.
Lenders usually won't rely on one the way they rely on a formal appraisal, so don't plan financing around it.
Mistakes I see
Picking a licensee because they named the highest price. Using an opinion for financing or tax. Not asking for comparables.
In BC and Vancouver
BC Financial Services Authority (BCFSA)'s rules govern licensee conduct, including competence. Formal appraisals follow professional appraisal standards.
Official sources: BC Financial Services Authority · Real Estate Services Rules (BC Laws)
What it is
An opinion of value is an estimate of what a property might sell for, prepared by an agent based on market data.
It is not a formal appraisal and is used mainly to help owners plan.
Using it
Ask what sales, leases and assumptions the opinion relies on, and how your property compares with them on size, condition and location.
Use it to plan pricing and timing, and update it if the market moves. I can prepare one for your property.
Questions to ask before you sign
- What comparables support this?
- What assumptions were used?
- Do I need a formal appraisal instead?
- Why do the opinions differ?
Keep reading
Related terms: Appraisal, Comparable sale (comp)
Working through this right now? Questions are free. Book a 15-minute call or call or text 604 256 2002, and I’ll give you a straight answer.
Back to the A–Z index · common questions · tactics to watch for · the shorter glossary
General information for British Columbia only. It isn’t legal, tax, accounting or financial advice, laws and rates change, and reading it doesn’t make you my client. Any numbers or scenarios are hypothetical. Check the linked official source and talk to a lawyer, accountant or other qualified professional before you act or sign anything. See the terms and disclaimer.