Appraisal vs CMA vs BPO – What’s the difference?

Thomas (Tom) Horn Real Estate Appraisal FormMany people know what an appraisal is, and they’ve heard of a CMA (Comparative Market Analysis) and a BPO (Broker Price Opinion) but they don’t know the difference. Today I thought I would compare these 3 methods used to estimate the value of a property.

Comparative Market Analysis (CMA)- The CMA is performed by real estate agents when pricing a home for sale. It typically includes information on recently sold homes, current active listings, pending sales, withdrawn and cancelled listings, and expired listings. The report is focused on information that will be used to determine a list price for the home. Buyers agents can also do a similar CMA to determine if the home is worth what is being asked and so the buyer can make an informed decision.

The CMA is usually a qualitative comparison because actual dollar adjustments are rarely used. This is not a rule, however I have never seen a CMA where adjustments were applied. In a qualitative comparison, features of the homes are compared to each other to arrive at a list price estimate. Agents will look at the different types of listings to decide what other homes like yours have sold for, how long it took to sell them, and  the difference between the sales price the the list price. All of these pieces of information will help them to decide on a competitive list price for your home.

Broker Price Opinion (BPO)- While the CMA is done by a real estate agent to come up with a list price for the owner/seller, the BPO is usually ordered by a lender or bank to value a property that could be in the process of being foreclosed, however this is not always the case and I have heard of some banks might using them for the refinance of a loan. In addition, a BPO is performed when a foreclosure property is being listed for sale. The lender typically does not want to take the time necessary to do a full appraisal nor pay the fee for one.

Two types of BPO’s include a drive-by and an interior inspection. The drive-by is performed as you might guess, by just driving by the exterior of the home while the interior would include viewing the inside. If the BPO is being done for foreclosure purposes then the interior inspection could reveal damage to the home and require estimates to repair them. If the foreclosure is being listed for sale the value could be based on a quick sale situation because the lender does not want to hold on to the property for a long time because of added expense.

Appraisal- An appraisal is an unbiased opinion of value for either a purchase, refinance, or listing of a piece of real estate. It can be ordered by the homeowner, bank, insurance company, or other interested party who wants to know the market value of the property. Other uses include construction loans, insurance valuations, estate planning, and tax valuations. An appraisal most always includes a greater amount of information in the report than a CMA or BPO on the subject property as well as the surrounding neighborhood and community.

The appraisal report contains physical data on the subject property including gross living area, materials of construction, and a description of its condition as well as the size of the lot it is on. Photographs of the exterior and interior features are included as well as items that may need repair. Information about the immediate neighborhood and surrounding community is also analyzed because they have a direct bearing on a properties value.

It is important to note that both the CMA and BPO are done to estimate the anticipated list price of a property while an appraisal is an opinion of the likely sales price based on recent closed and pending sales, and taking into consideration the existing inventory of homes. The appraisal has to meet lender and underwriter guidelines, therefore the sales that are used have to meet certain criteria relating to time of sale, distance of the comparable from the subject, and percentage adjustment guidelines.

If it likely that a property will use bank financing when it is sold it is important for those real estate professionals that prepare CMA’s and BPO’s to keep this in mind when preparing these reports. The value they arrive at should also consider this criteria. An example of this would be using sales that exceed typical time of sale guidelines from an earlier period that may have had better market conditions. The sales may indicate a higher value based on the older comparables rather than more recent sales that indicate a lower price. I’ve included below some other blog posts of mine that relate to pricing a home that may be helpful to other real estate professionals.

  1. Is it a sale or is it a comparable?
  2. What is bracketing and why should Realtors do it?
  3. Why do appraisers make adjustments?

Can you think of any other differences between the CMA, BPO, and appraisals? I look forward to hearing from you.

If you have any real estate appraisal related questions you can call me at 205.243.9304, email me, or connect with me on Facebook., Twitter, or Youtube.


  1. Mirkala Tellez says


    I have a case, I requested a BPO and the agent gives me a CMA, the agent said that is similar but I still need a BPO, where can I found a sample of a BPO to be used as a sample.

    Thank you in advance.

  2. BPO’s are a way for banks to get around paying $300 for an appraisal. They simply pay a real estate agent $50 for the same basic information and then (in my case anyway) the banks come back to the Broker over and over to try to get them to change their numbers.

    • I agree with you Rob. I guess they are good to a certain degree and are cheap for the bank but not nearly as accurate as an appraisal. The bank can continue using brokers to do them for that price, especially if they’re going to keep coming back for revisions. Doesn’t make business sense to me.

  3. silver price says

    Simply put, a CMA is your broker’s attempt to establish an opinion of value in order to sell your property for the most money possible, or in the case of a buyer’s agent, to determine if your offer is in not above their opinion of value. An appraisal report is a licensed appraiser’s opinion of fair market value and whether or not the property is worth the price you are trying to buy or sell it for.

  4. Nice job Tom. I’ve found many BPO agents to wonder what appraisers actually do in their reports. There is definitely a difference despite the forms having a strong similarity.

    • Thanks Ryan. Another big difference in our area is that agents do not measure there listings so the square footage is unknown unless they have an old appraisal. Of course the appraisal has the measurements and square footage which helps in the valuation process.


  1. […] including agents, often face pressure from clients to incorporate outlier sales into their Comparative Market Analysis (CMA). Clients may have a vested interest in inflating or deflating the value of a property to […]

  2. […] you price a home using market data by doing a CMA, and you are aware of the local market price levels then you can make a better-informed decision […]

  3. […] know the true market value of the property in question. A thorough market analysis, such as a  CMA, will help the agent to determine this […]

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