Shortsaleopedia

What is a BPO?

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What is a BPO? How long does it take to get ordered?

asked August 17, 2011

11 Answers

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A BPO is a Broker Price Opinion. It is a method the banks use to help determine value of the property. The BPO is usually produced by either the agent for the seller or sometimes by an agent or appraiser working for the lender. The BPO will contain comparable sales of similar houses in the neighborhood, with adjustments made for condition and attributes, to determine what the market value of the subject property is.

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Regarding a short sale the BPO, or Broker’s Price Opinion is a a valuation of the subject property by an independent third party. Most of the time this will be done by a Realtor from somewhere near your community….. That is where the problem most often starts and ends. First off, you must make common sense of the fact that if that Realtor knew how to sell real estate he or she would not be doing BPO’s for a living. They get paid about $85 before Broker splits. Your listing agent should remove you lock box and insist on meeting the BPO agent at the property. Your listing agent should have in hand at the time of the meeting information to show the BPO agent how much the home with worth and how much the Purchase and Sale Contract is for. You listing agent is for sure going to offend some of these BPO agents, but some are going to welcome the help. Expect anything and everything with the phase of the short sale. I just had an agent call to do a BPO in Melbourne Florida. He did not show up, but a lady did. She was from Vero, 65 miles to our south. She was an unemployed cashier with a car and a camera. The BPO agent was in Jacksonville, 200 miles to our north. Turns out he has hired several people in different areas to take photos…… GOD only knows where he gets his comparable sales. He is not a member of our local MLS.

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Broker Price Opinion is used by lenders and mortgage companies to value properties if they believe an appraisal is, or may not be, necessary. Two types of BPOs – Drive By BPO (outside) or Internal BPO (inside). The BPO is a common tool for lenders in foreclosure and refinance situations. The Internal BPO requires more effort: Additional information, valuation work and photos.

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Broker Price Opinion. Some mortgage companies will send a licensed appraiser to put a value on the property to be short-saled. Other mortgage companies will send real estate agents to do the BPO. I try to make sure I meet the appraiser at the property and explain that we are trying to do a short sale, etc. I will often change my showing instructions to make certain appraisers and brokers/agents don’t visit the proeprty without me. My job is to make sure the transaction can close.
Some BPO’s for short sales are “drive-bys” . These are the most difficult to have control over. The BPO agents often aren’t familiar with the area and often aren’t even familair with the process. They may be making their living doing BPO’s and not actually selling real estate. This results in a price much higher or much lower than real value and can often result in losing the contract you presently have and having to start the marketing strategy all over.
It depends on the morgage company how fast it is ordered. Normally it is ordered once the short sale package is complete and has been assigned to a negotiator.

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BPO, or Broker Price Opinion is a ‘cheap’ version of the lender getting an opinion of the value of a property. Always ask the lender to consider doing an appraisal instead. Better and much more accurate results.

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A BPO is a broker price opinion used by the banks as an assessment of fair market value. It is similar to a Comparative Market Analysis entered on-line on specific lender forms. When a Realtor generates an opinion of value it is called a BPO; when a licensed appraisal submits same it is refered to as an appraisal.

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A BPO is a broker price opinion used by the banks as an assessment of fair market value. It is similar to a Comparative Market Analysis entered on-line on specific lender forms. When a Realtor generates an opinion of value it is called a BPO; when a licensed appraisal submits same it is refered to as an appraisal.

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The BPO, or Broker Price Opinion, is a tool used by lenders and mortgage companies to value properties in situations where they believe the expense and delay of an appraisal is not necessary. While we realtor do CMA’s, or Comparative Market Analysis, for our real estate clients, BPO’s are different.
Companies hire a real estate broker to prepare an opinion of value. The representative of the broker, generally a real estate agent, compares three similar properties that have recently sold to the subject property and adjusts up or down for differences.

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Brokers Professional Opinion of the current value of the asset, what it is likely to sell for in its current condition, with repairs, and advises the asset manager if there are any potential liabilities or vacancies the lender should be aware of.

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A Broker Price Opinion. Nowhere near as accurate as an Appraisal. Things got so bad in California that they passed the following law:

DRE Can Discipline Licensee for Inflating BPOs:Beginning on January 1, 2009, the DRE can suspend or revoke a real estate license if the licensee generates an inaccurate opinion of value (Broker Price Opinion or BPO) for a short sale of residential real property to manipulate the lender to reject the short sale or to acquire a financial or business advantage, such as obtaining a listing agreement. This new rule aims to preclude a self-serving agent from inflating a BPO in hopes that the lender will reject the short sale, foreclose on the property, and give the BPO agent an REO listing. Senate Bill 1737.

Wish they would do that here in AZ as well.

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This is a Broker’s Price Opinion. These have been around for decades. Similar to an appraisal, they are prepared by a real estate licensee. They are not certified as appraisals are and they would not hold up in court as an appraisal would but they can be obtained by the lenders for a fraction of the cost of an appraisal. Once a lender is considering a short sale, they will send out a licensee to do a BPO. Typically the listing agent already gave the lender either a BPO or a Comparative Market Analysis. With these tools, the lender decides if the buyer is paying enough for the property. I have seen lenders order more than one BPO if there is a big price difference between what is offered and what the BPO came in at.

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