What is a BPO

A BPO or Broker Price Opinion is basically a mini appraisal completed by a real estate agent. It is very similar to a CMA (comparative market analysis) which a real estate agent would submit to a seller when soliciting to list a home.

Mostly BPO’s are ordered by lenders for distressed properties that are in the foreclosure process and for short sales.

More recently with the severe drop in the housing market lenders are ordering BO’s as second opinions for home loan refinances and for home purchase loans.

A BPO usually consists of:

1. A number of pictures of the outside of the house including one of the mail box or hall door showing the street number. This is to ensure that the agent doing the BPO actually visited the site and did not use pictures from the MLS or Zillow.
2. 3 recent comps from the MLS of recently sold similar homes within 1 mile radius of the subject property.
3. 3 listed for sale comps from the MLS of homes currently for sale within 1 mile radius of the subject.
4. Some data such as sq. footage, lot size, number of rooms and age which is available from public records.
5. Broker’s opinion of current value of subject property considering the price and condition of sold and listed comps compared to the condition of the subject property.

For the agent performing the BPO a visit to the property is required as is some time performing the analysis and filling out the BPO online.

The average BPO pays $50.

BPO’s have become the realm of the few who are willing to carry out a lot of work for short money in the hope of getting the home as a listing from the foreclosing lender after the home is auctioned off. Most foreclosure auctions produce no bids and the home is usually bought back by the mortgagee at the auction who will then evict the owner and list the home for sale with a broker in the area.

Large producers of BPO’s will usually hire a photographer and pay less than $1 per photo. They will also hire a non agent clerk to fill in the BPO paperwork. This allows them to break even on the BPO and keep in good standing with the financing institutions and hence get many REO listings.