A BMA in real estate stands for a Broker’s Market Analysis. It’s a method used to determine the value of a home during a relocation. It’s often confused with other home valuation strategies like BPO, CMA, and appraisals but it’s quite different and there is a reason why it’s used primarily in relocations.
In this quick reference guide, we’ll cover what a BMA is in real estate and how it applies to your relocation.
What is a BMA in Real Estate?
A BMA or Broker’s Market Analysis came into play when relocation companies started using Broker’s to list and sell their relocation client’s home. At the time, this process was exclusive to the relocation industry and was essentially a more basic and much quicker form of an appraisal.
The Broker would compare the house to other similar ones on the market to come to the conclusion of the final listing price to sell the property within a specific period of time.
What makes this different from a Comparable Market Analysis or CMA is the timeline.
Since relocation companies are generally working on a tight deadline to sell a home during the moving process, the price that the BMA comes to would likely be lower than a CMA because of the urgency behind the sale.
What is a BPO?
What does BPO stand for? It stands for Broker Price Opinion and it’s considered to be a step up form a CMA and can be ordered from a lender, homeowner, or bank to determine the price of a home being sold as a result of a business relocation.
This process is still less expensive than an appraisal because of the person preparing it. Since it’s not being performed by a certified appraiser, it’s actually illegal in some states. The adjustments are limited on a BPO which can skew the value of the home in one direction or the other.
What is a CMA?
A CMA or Certified Market Analysis is prepared by a Licensed Realtor to determine the best sales price of a home based on the current market.
The main thing that separates this from the previous two options is that it focuses less on the features and improvements of the home and more on the current market.
Adjustments are made based on square footage of the comparable properties then compared to other properties of similar size that have sold recently within a certain mile range of the house in question.
This is considered a highly standard procedure and if you’re hiring a real estate agent for relocation to help during the relocation process then chances are, this is the type of valuation you’ll receive.
How Does an Appraisal Compare?
As appraisal is considered the most comprehensive way to determine the value of a house and what it should sell for in the current market.
This is because it combines all the elements of each option into one. It uses the current market conditions, recent sales, comparables, and every detail about the house in question.
During an appraisal, a Certified Residential Appraiser will go into the house and take an extensive look at all the details of the home rather than just factor in the square footage and exterior appearance.
Factors like the age of the roof, condition of the windows, hot water heater, heating source, foundation, and updates will all play a major role in the actual value of the home compared to other sales in the neighborhood.
How These Apply to Relocation
A BMA in real estate is one of the most common options for a relocation. If you or your team members are in the midst of relocating and you have employees that need to sell their home, part of the relocation package could include the business purchasing these homes and selling them.
It’s also important to remember the timeline and why a BMA has an impact on this. If you’re relocating employees in 30 days and they’re securing a home in their new location, this opens a small window of opportunity for you to sell their existing home to ensure that the company doesn’t have to take a hit.
No appraisal licensure or accreditation is required for a BMA so it’s also much easier to perform one quickly.
How to Decide What You Need
Depending on the situation, it often comes down to cost. An appraisal can help you get the most for the sale of a home but it can also take the longest to complete and it will cost the most to get the appraisal performed.
If you’re looking to save some money and time, a BPO or BPA will be the easiest way to determine the value of the home but it doesn’t factor in various details such as comparable internal features of homes that only a Certified Residential Appraiser would have access to.
A Certified Market Analysis is one of the simplest options because you’ll likely need to have a real estate agent help you during the relocation process. They’ll perform a CMA to determine the value of the property compared to what is currently selling and they’ll settle on a price from there.
What’s most important is to understand that you don’t need to go at it alone. Whether you’re the General Manager, HR Manager, or an employee with the company; hiring a professional relocation company can take a lot of this off your back.
We specialize in helping businesses of all sizes to relocate, and we can assist in every step from A to Z. We have a proven process that helps you sell off the homes and relocate smoothly while ensuring you preserve as much of your relocation lump sum as possible.
To learn more about ARC Relocation, schedule a free consultation today by clicking here.