BPO Basics


What is a BPO?
A BPO is an acronym for Broker Price Opinion.  A BPO is a property valuation conducted by Real Estate Agents and Brokers (Field Agents) in their specific real estate market.  The probable sales price of a property is based on three comparable sales and three comparable active listings.  A BPO requires the agent physically and visually inspecting the property, providing comps that support a suggested list price and anticipated sales price, and providing data and comments on neighborhood and market conditions.

Who can complete BPOs?
BPO can be completed by licensed real estate agent, broker, or appraiser.  The real estate or appraiser license must be active and in good standing in the state the BPO is completed in.  In addition, errors and omissions are typically a requirement.

Why do agents complete BPOs?
There are many reasons for completing BPOs.  The typical reason for agents completing BPOs is to generate additional income.  This can be in two forms:  (1.) For many asset management companies, the more BPOs one completes, the more listings one will receive.  For this reason, BPOs are one of the ways to obtain listings from the asset managers;  (2.) The fees paid for each BPO completed can generate substantial income.  An agent also gains exposure to their local foreclosure and short sale market, giving them great opportunities to become an expert in “finding great deals” for their buyers.

Why are BPOs ordered?
BPOs are completed faster and more efficiently than an appraisal. Therefore, the cost of a BPO is less expensive. BPOs are ordered by banks up to 6 times or more during the period of a defaulting loan. Because of those two factors, speed and lower cost, the financial institutions prefer ordering BPOs over appraisals, especially when ordering multiple times on every one of their defaulting loans.  BPOs are ordered for loan servicing needs, lending requirements, private mortgage insurance (PMI) removal, among many other reasons. This and more are thoroughly explained in detail within the BPO certification course.