Common questions related to Broker Price Opinions.
What does BPO (Broker Price Opinion) mean?
BPO is an acronym for Broker Price Opinion, it is most commonly referred to as a BPO in the real estate community.
What is the purpose of a BPO?
A BPO is performed to determine the value of a home. It is most commonly performed when a home is in default and the bank would like to know what the current value would be in the event of needing to sell the home if it become a REO asset. A BPO will also be completed prior to a home being listed for sale when it’s a REO. BPO’s are typically completed at the request of a loss mitigation or REO department. Local real estate agents are who most commonly perform a BPO because they are more familiar with their local real estate market.
What is in a Brokers Price Opinion report?
The BPO is a combination of information. There are exterior BPO’s and exterior and interior BPO’s. All BPO’s will require a drive by visual inspection of the property. The inspection of the property will require that you take a photo of the front of the subject, one photo that verifies the address and usually one street scene photo. If you are doing a interior BPO you will need to gain access to the property and complete several interior photos so the lender that verify the condition of the interior of the property. The date needed for a BPO will be 3 active sales comps that most closely match your subject property and 3 sold comps. These comps should all be within a 1 mile radius of the property and you will probably be required to upload photos or MLS printouts of each comp, Lenders want to see the most closely matched property within the last 90 days to determine how long it will take to get this home sold and what price they would be able to sell the home in 90 days. The most recent sales are a huge factor to help you determine what the home would sell for within a 90 day period.
Why do you need a Broker Price Opinion?
BPO’s help lenders determine the value of a home. It provides them with a reliable accurate opinion of a properties value and what it would sell for instead of an appraisal that will tell the investor what the value may be. The investor will use a local real estate broker to perform a BPO because they are more familiar with the local real estate market. The investor wants to know what they would be able to sell the home for within 90 days. This value may be different then what an appraiser would come up with. Lenders are not in the business of owning real estate and will work with home owners to help them avoid foreclosure but in the event of a foreclosure the lender will want to know what they can sell the home for within a certain period of time.
We handle broker price opinions but please visit our broker price opinion services page for more information about ordering a BPO. REO companies looking to establish a relationship with an experienced REO team who would like to order a Broker Price Opinion, please visit our Broker Price Opinion page.