Commercial property appraisals are expensive, often costing $3,000 to $6,000.  In addition, new commercial real estate lenders quickly learn that apprasials are often over-inflated - especially if the appraisal was ordered by the borrower.

Hard money commercial lenders have therefore learned to get at least one BPO on every deal.  A BPO is a Broker's Professional Opinion.  Unlike a narrative appraisal, a BPO is typically just a one-page summary of a local real estate broker's opinion of the property's market value.

Local real estate brokers know their markets because they work their territory every day.  Unlike appraisers, who work from appraisal theory, local brokers work based on their experience in the trenches.  Their valuations are very often far closer to the truth.

It has been the experience of your author, a hard money lender for 26 years, that many appraisals are a little too high.  On the other hand, the typical BPO is often a little bit too conservative.  My own hard money mortgage company regularly sells foreclosed property for 20% to 30% more than the BPO. 

So the typical independent fee appraisal is too high, and the typical BPO is too low - but on average the typical BPO is closer to the actual market value of the property.