Texas · Chapter 09 of 44
Methods of Estimating Value and BPOs
Sales comparison approach, cost approach, income approach, gross rent multipliers, Comparative Market Analysis (CMA), Broker Price Opinion (BPO), and assessed value.
30-minute read · Built for the TREC Sales Agent Exam
sales comparison approachcost approachincome approachreproduction costreplacement costphysical deteriorationfunctional obsolescenceeconomic obsolescenceGRMGIMNOIcap rateCMABPOassessed value
Sales Comparison Approach
Most common for RESIDENTIAL property. Find recent sales of similar properties (comparables/'comps') and adjust for differences. Based on principle of substitution. Steps: identify comparable sales, analyze differences, adjust comparable's price (NEVER adjust the subject), reconcile adjusted values.
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