A broker opinion of value and an appraisal do different jobs, so a DC apartment building owner does not choose between them. A broker opinion of value (BOV) is an evaluation you commission to decide whether to sell, hold or refinance. An appraisal is the formal valuation a lender orders to support a loan. Owners usually need both, in that order. The work you do on your verified financials before the appraisal shapes what the appraiser sees.
Key takeaways
- A broker opinion of value is an evaluation, not a formal appraisal. You commission it. The lender orders the appraisal.
- On a Fannie Mae multifamily loan, the lender selects and approves the appraiser. You cannot hand documents straight to the appraiser.
- A broker opinion does not automatically replace an appraisal. Your lender’s underwriting guidance for your loan controls.
- The numbers behind both are the same: the rent roll, leases and trailing twelve months. If those disagree, expect a lower value.
- A value is a range. At a 7.3% cap rate, every $1,000 of recurring net operating income (NOI) is worth about $13,700.
What is the difference between a broker opinion of value and an appraisal?
A broker opinion of value is a broker’s evaluation of what a building is likely to sell or refinance for. An appraisal is a formal opinion of market value from a licensed appraiser, written to professional standards for a lender.
| Feature | Broker opinion of value | Lender appraisal |
|---|---|---|
| Purpose | Decide whether to sell, hold or refinance | Support the loan amount for a specific loan |
| Who prepares it | A broker | A licensed or certified appraiser |
| Who selects the preparer | You, the owner | The lender |
| Standing | An evaluation, not a formal appraisal | A formal opinion of value |
| Can it replace the other? | Not automatically | Required when the loan program calls for it |
The last row trips up owners. A lender may use a broker opinion as a preliminary input. The controlling requirement is the underwriting guidance for your specific loan. Confirm it with your lender before you lean on a broker opinion for anything beyond planning.
Who orders the appraisal, and what does the lender require?
The lender orders it. Fannie Mae’s multifamily program is a useful published benchmark, though it generally covers buildings of five or more units. Many 5 to 50 unit loans come from banks, credit unions and other local lenders, and each sets its own rules. Your lender’s term sheet and loan documents control.
Under Fannie Mae’s instructions, the lender selects and approves the appraiser, who must be a Certified General Appraiser or the state equivalent. The same instructions bar anyone from influencing the appraisal through coercion or other means. In practice, that means documents go to the lender first. The lender reviews them and passes them to the appraiser. Do not deliver documents to the appraiser yourself.
That makes your pre-appraisal work the only lever you have. You cannot steer the appraiser. You can make sure the lender receives a package that holds up.
Does your DC apartment building need an appraisal to refinance?
If a lender is making the loan and its program requires an appraisal, yes. For the wider picture of what DC lenders look at, read Refinancing a DC Apartment Building.
What should you review before the appraiser arrives?
Your income and expense records, tied back to leases and bank deposits. Under Fannie Mae’s instructions, the lender gives the appraiser:
- the most recent property condition report or a comparable inspection report
- a rent roll dated within 60 days of the inspection
- historical operating statements
- year-to-date income and expenses
The 60-day window is a Fannie Mae requirement. Other lenders set their own. Treat it as a good habit anyway. A stale rent roll invites questions.
Before any package goes to a lender, I reconcile the rent roll to the leases and to collections. Then I tie the trailing twelve months to bank deposits. I flag unusual repairs, concessions, vacancies and one-time items and explain each one on paper before someone else asks. Your next lender and your next buyer price the building on the income it produces today, from records they can verify.
What if the building has a tax abatement?
Gather the paperwork early. Fannie Mae’s revised instructions require two capitalization analyses for a property with a tax abatement, one using full taxes and one using abated taxes. Pull the abatement agreement, its effective dates and the remaining term before valuation work begins. The gap between the two analyses can move the value.
Why is a value a range, not a number?
Because the cap rate you apply moves the answer. Here is the arithmetic with a hypothetical building. It is not a forecast for any building.
Take a building with $120,000 of verified NOI.
| Cap rate | Source | Indicated value |
|---|---|---|
| 7.3% | CoStar market cap rate, DC buildings of 0 to 20 units | $1,643,836 |
| 6.95% | My own closed comps, 24 reported sales (a thin sample, so a direction only) | $1,726,619 |
That is an $82,783 spread from one building, one NOI and two sourced cap rates. A broker opinion of value shows you the range and the evidence behind it before a lender picks one number.
NOI moves value too. At a 7.3% cap rate, $10,000 of recurring NOI is worth about $137,000. That is why I read the expense column before I recommend a refinance or a sale. For how I turn a range into three values, read how to price an apartment building. For the current small-building numbers, see my November 2026 DC market report.
How does a broker opinion help you decide between refinancing and selling?
It gives you a working value range before you spend lender time and goodwill. When owners ask me whether they need an opinion or an appraisal, my answer is usually the opinion first. It helps you choose the path. The appraisal follows once a lender is involved.
Do you need an opinion of value before a DC sale?
No law requires one. I recommend one anyway. It lets you test pricing against the numbers a buyer’s lender will see. In DC, a sale also carries TOPA timing, which adds process before you can close. I cover that in selling a DC apartment building and TOPA. A buyer who finances the purchase will have the lender order an appraisal, and that appraisal tests the same documents again.
What does the sequence look like?
- Get a broker opinion of value if you are comparing a sale with a refinance.
- Reconcile the rent roll to leases and collections.
- Verify historical and year-to-date income and expenses.
- Identify unusual repairs, concessions, vacancies and one-time items.
- Give the organized package to the lender. Let the lender control delivery to the appraiser.
If the review shows income is weaker than you thought, the expense column is usually where you can still act. Find that out before an appraiser capitalizes the income.
No source I rely on sets a universal appraisal turnaround, fee or loan-to-value for every building. Those vary by lender and property. Your numbers and your lender’s terms decide.
Frequently asked questions
Do I need a broker opinion of value before refinancing my apartment building?
No. A broker opinion of value is a planning tool, not a loan requirement. It helps you decide whether to refinance, sell or fix NOI first. The lender will still order its own appraisal if its program calls for one.
Will a lender accept a broker opinion of value instead of an appraisal?
Not automatically. A lender may use a broker opinion as a preliminary input, but its underwriting guidance for your loan product controls. Confirm with the lender before you rely on one for anything beyond planning.
Who orders the appraisal on an apartment building refinance?
The lender does. On a Fannie Mae multifamily loan, for example, the lender selects and approves the appraiser, not the borrower or the borrower’s broker. Your loan terms set who pays, so confirm it up front.
What documents does the appraiser need?
Under Fannie Mae’s instructions, the lender gives the appraiser four items. They are a rent roll dated within 60 days of the inspection, historical operating statements, year-to-date income and expenses, and the latest property condition report. Other lenders set their own lists.
Does a tax abatement change how a lender values the building?
It can. Fannie Mae’s revised instructions require two capitalization analyses for a property with a tax abatement, one with full taxes and one with abated taxes. Gather the abatement agreement, effective dates and remaining term before valuation begins.
Next step
Start with the free Value Navigator worksheet to see where your building’s number comes from. Then book a free 15-minute call and we will review your building’s numbers before a lender does.
About Shafiq Hirani
Shafiq Hirani, MBA, CCIM, is an Associate Broker with RE/MAX Distinctive Commercial who represents owners and buyers of 4 to 50 unit apartment buildings in Washington DC, Virginia, and Maryland. He helps owners raise net operating income, cut wasted expenses, and position a building for a stronger refinance or sale, and he helps buyers test an offering before they commit. With more than 35 years in real estate and experience owning over $220 million in commercial property, he reads the numbers before recommending a rent strategy, an expense review, a refinance, a purchase, or a sale.
RE/MAX Distinctive Commercial · (202) 290-1055
Equal Housing Opportunity. Shafiq Hirani is licensed in Washington DC, Virginia and Maryland. He is a real estate broker, not a tax advisor, attorney or securities representative. This article is general information, not legal, tax or financial advice. Have an attorney and other licensed professionals where the property is located review your decision before you act.
Sources: CoStar November 2026 DC Multifamily Search Analytics, 0 to 20 units, report date 2026-11-10. My own closed-sale data (CoStar and Bright MLS), build 2026-11-10. Fannie Mae Instructions for Appraisers, Multifamily Selling and Servicing Guide. Fannie Mae Multifamily Guide, Appraiser Independence. Market data © CoStar, used with permission.