What is a “Realtor Opinion of Value” (ROV)?
As part of the real estate transaction process, the primary thing that has to get done is to determine an estimate of the value of a commercial property.
Property owners requiring an opinion of value, but who do not require a proper appraisal can use the service of a commercial real estate brokerage.
Methods for which an “ROV” is determined
Three commonly known methods can be applied to calculate the value of a property:
The Cost Approach, the Income Approach, and the Direct Comparison Approach.
Value by the Cost approach is arrived at by adding the land value to the replacement cost of the improvement less depreciation.
The Income Approach involves the capitalization of a property’s net revenues or probable net revenues at an appropriate market rate, into a suggestion of value.
The Direct Comparison is applied by comparing the subject property to similar properties that have sold recently or are on the market.
Information included in a “ROV”
· Description of physical characteristics of the property
· Description of the area where the property is located
· Historical and current market data
· Property photographs
· Sales comparable
· Comparable properties currently for sale
· Market valuation
· The realtor’s opinion of current market value