Valuation, Market Analysis, and Licensee Practice/Recordkeeping
Value concepts
Market value assumes informed, willing parties, no undue pressure, and reasonable exposure time. Highest and best use is the reasonably probable, legally permissible, physically possible, financially feasible use that produces the greatest value. The sales comparison approach adjusts comparables toward the subject-never the subject toward the comparables-for differences in time, location, size, condition, and features. The cost approach suits new or special-purpose property; the income approach uses capitalization rate and gross rent multiplier, and value moves inversely to cap rate.
CMA versus appraisal
A comparative market analysis is a brokerage opinion prepared to set a list price; an appraisal is a supported valuation, and in federally related transactions it must be performed by a licensed or certified appraiser under USPAP. Licensees may prepare CMAs but must not call them appraisals or imply appraisal credentials they do not hold.
Practice and records
Commission rules require licensees to keep transaction records-listing and brokerage agreements, offers, closing documents, trust account records-available for inspection, retained for the period the rules specify. Recordkeeping failures are independently sanctionable, even where the transaction itself was clean. Antitrust rules forbid price-fixing or market allocation among competitors, and fair housing rules forbid steering and discriminatory statements.
Rule of thumb
Adjust the comps, document the reasoning, and keep the file as if the Commission will read it-because it can.