What is BPO in Real Estate?
BPO stands for “broker price opinion” and is an opinion of a qualified real estate professional’s assessment of value for a particular property. This is a very important process each time a home is sold or refinanced.
Why is a BPO Used?
A broker price opinion can provide vital information to lenders, insurance companies, and investors. It is also used by banks and mortgage lenders to determine whether they should approve a mortgage loan. They can be valuable when appraisers are unable to get access to a property and report on the condition.
Who Performs a BPO?
Qualified real estate professionals, such as brokers or agents, are most often the professionals who are hired to provide a broker price opinion on a particular property. They are familiar with local markets and have extensive experience in appraising properties. They will inspect the property, take numerous pictures, research comparable properties, and then present a written report with an estimate of value.
What Does a BPO Include?
A broker price opinion must include property characteristics, the estimated market value of the property, and the opinion of qualifications of the broker or agent who wrote the report. It should also include factors affecting the value, such as improvements, neighborhood conditions, and comparable sales.
How Is a BPO Used?
A broker price opinion is invaluable in providing information to lenders and other interested parties in real estate transactions. It allows the lender to determine if refinancing or offering a loan makes financial sense, and can be especially useful if an appraiser is unable to provide an appraisal. It can also help an investor decide on the best offer to make on a property.
BPOs are an important part of the real estate industry, offering reliable and valuable information to help lenders, investors, and other parties make sound decisions when considering a purchase. It is important to hire qualified professionals who have the experience and knowledge to provide an accurate report.