In this guide
- What a formal appraisal is, and who may produce one
- What a broker opinion of value is and who asks for it
- What a lender will and will not accept
- How a going-concern appraisal splits property, equipment, and business value
- How the two differ on cost and turnaround
Key takeaways
- An appraisal is a licensed, regulated opinion of value; a broker opinion of value is a market read from the person who would sell the asset.
- Lenders order appraisals and rely on them; they do not underwrite off a broker opinion. A BOV informs your pricing decision, not a credit decision.
- A going-concern appraisal allocates value across real estate, equipment, and intangibles, which drives both financing and tax treatment.
- A BOV is usually free or low-cost and comes back in days; an appraisal is a paid engagement measured in weeks.
- Ordering the wrong document costs time, not just money — decide first whether you need a number to market against or one a third party will rely on.
What is a care home appraisal, exactly?
An appraisal is a signed valuation report produced by a state-certified appraiser under professional standards, intended for other parties to rely on. That reliance is the point. The appraiser has a licence, a defined scope, a stated effective date, an identified client, and liability if the work is wrong.
For a care home the credential needed is usually a general certification rather than a residential one, because the property is income-producing and often includes an operating business. Appraisers who work in seniors housing are a small group, which is one reason turnaround is slow.
The report states a defined value — market value as-is, or a prospective value at stabilization — and says which one. Those are not interchangeable: a value at stabilized occupancy is a different number from what the home is worth today at 62 percent full.
What is a broker opinion of value and who orders one?
A broker opinion of value is the agent's or broker's written estimate of what the asset would sell for, prepared to help you decide rather than to satisfy a regulator. It goes by several names: BOV, BPO, opinion of value, or just "the pricing analysis."
Sellers order them most often, before deciding whether to go to market. Buyers sometimes commission one as a second read on an asking price. Lenders occasionally use them to monitor loans they already hold — different from using one to write a new loan.
A good BOV is not a guess. It should show comparable sales, the income approach applied, the cap rate assumptions behind it, and a defensible normalized NOI. If it is one page with a range and no arithmetic, that is marketing, not analysis. Ask to see the work.
Will a lender accept a broker opinion of value?
For an actual loan on the property, no — the lender orders its own appraisal from its own approved panel, and you generally cannot supply one you commissioned yourself. This surprises sellers who paid for an appraisal early and expected it to travel with the deal.
The rule of thumb: whoever bears the credit risk controls the appraisal, and lenders engage the appraiser directly to preserve independence. Government-backed programs add their own requirements on appraiser qualifications and going-concern treatment, so if your buyer is pursuing government-backed financing, expect the lender to dictate scope entirely.
How does a going-concern appraisal handle the business?
A care home appraisal usually values the total assets of the business — real property, equipment, and the going concern — then allocates that total across the three. A vacant building appraised as real estate alone is a different exercise, and a much lower number.
The allocation matters three ways. It affects how much a lender will advance, because real property supports longer amortization than goodwill does. It affects the purchase price allocation the parties report, which has tax consequences on both sides. And it exposes disagreements early: if most value sits in intangibles tied to the current operator, a buyer will ask why that value survives closing.
That is the tension covered in real estate value versus business value: in a small home where the owner is also the administrator, more value is bound up in the operator than the seller wants to believe.
What do they cost and how long do they take?
A broker opinion of value is commonly provided at no charge by the agent seeking the listing and comes back within days; a going-concern appraisal is a paid engagement that runs weeks from instruction to delivered report. Fees vary widely by market, size, and scope, so get a written quote.
Timelines stretch on appraiser availability, the volume of operating data you have to hand over, and any restatement needed when the books are messy — so clean, buyer-ready financials shorten the process. Appraisals also age; lenders commonly require a report within a set recency window.
When does a seller genuinely need the formal appraisal?
When a third party will rely on the number and has standing to challenge it. That is the test.
Situations that usually require one: a partnership buyout; a divorce or estate settlement; gift and estate tax reporting; litigation; a refinance; and any transfer between related parties where a tax authority may later ask how the price was set.
Situations where a BOV is enough: deciding whether to list, setting an asking price, testing whether a year of occupancy gains changes your outcome, or sanity-checking an unsolicited offer. Start with a BOV plus a broader read on how care homes are valued, then order an appraisal only when a reliance situation arrives.
Not sure which one your situation calls for?
Bring the decision, not the document. An agent who works this asset class can tell you in one conversation whether a pricing analysis answers your question or whether you need a certified report, and can point you toward appraisers who understand going-concern care homes. Get matched with a Buy Sell Assisted Living expert.
Informational only — not financial, investment, legal, or tax advice. Appraisal standards, lender requirements, and fees are state-specific and change over time; verify current requirements with a certified appraiser, your lender, and your tax professional.