Broker’s opinion of value vs. a formal appraisal.
What a broker’s opinion of value (BOV) is, how it differs from a certified business appraisal, and which one you need to price a business for sale in Texas.
A broker’s opinion of value (BOV) is a market-based estimate of what your business would likely sell for to real buyers today, built from your normalized earnings and recent comparable sales. A formal appraisal is a credentialed valuation report prepared to professional standards, usually for a lender, a court, the IRS, an estate, or a partner buyout. If you are deciding whether and how to sell, a BOV is usually the right first step. If a third party needs to rely on the number, you need an appraisal.
What goes into an opinion of value
A credible opinion of value starts with three years of financials and year-to-date numbers, rebuilds earnings into SDE or EBITDA with documented add-backs, and applies a multiple range drawn from comparable transactions in your industry and size band. It then adjusts for the things that move price: customer concentration, owner dependence, recurring revenue, growth, lease terms, and whether real estate is included. The output is a range, not a single number, along with the reasons your business sits where it does in that range.
What a formal appraisal adds
A formal appraisal is prepared by a credentialed appraiser following written professional standards, with a defined standard of value (such as fair market value) and a full report a third party can rely on. Lenders often order one for SBA loans above certain thresholds, and appraisals are standard for estate and gift tax, divorce, shareholder disputes, and buy-sell agreements. They take longer and cost more, and because they follow a fixed standard of value, the result can differ from what an eager strategic buyer would actually pay.
Which one you need
If you are an owner weighing a sale in the next one to three years, start with an opinion of value: it tells you what the market will pay and what to fix to get more. If you are settling an estate, dividing a business in a divorce, buying out a partner, or a lender has asked for one, you need a formal appraisal from a qualified appraiser, and your attorney or lender will usually specify the standard.
How Delta builds an opinion of value
Every Delta valuation is underwritten on Underridge, the platform our own engineers built, so each headline number traces back to a source page or a labeled assumption. You get a range, the comparable logic behind it, and the risks a buyer is likely to raise. The process is confidential and starts with our free business valuation request.