The question of “how much is my land worth” is common for landowners who may not be in touch with the current market activity or those who perhaps live out of state and therefore get out of touch with what’s going on locally. Nearly everyone is familiar with using an appraisal to get an independent, expert opinion on the value of a property. However, most people are NOT as familiar with another method commonly referred to as a BPO, or “Broker’s Price Opinion.”
BPO’s have been around for a long time and banks have routinely used them for different purposes depending on the project or loan size, but yet many landowners I talk with are not familiar with them or the benefits they offer. So let me explain what a BPO is in general terms:
- A BPO is usually a formal report that any qualified real estate agent or broker can do for you.
- A good ag land BPO should provide a description and overview of the subject property, with things such as soil maps, aerial maps, and “boots on the ground” pictures.
- The BPO should also identify a number of recent sales in close proximity and/or in similar characteristic to the subject property.
- Based on these recent sales and the author’s experience in the market, the report should give you a strong opinion on the value (or value range) of the subject property.
- They are generally much shorter than a full appraisal, which means two important things: 1) they can be completed within 1-2 weeks typically, and B) they are much less costly than a full appraisal.
BPO’s have been used in the past to help buyer’s and seller’s arrive at a fair price, to help families make an informed decision if now is a good time to sell or to hold, to help establish a basis for inheritance purposes, and much more. If you are interested in learning more about this or want a BPO done for your land in the Southern Red River Valley, please do not hesitate to contact us!
Until next time!