How to write a BPO report?

[ad_1]

Broker Price Opinion (BPO) reports are used by financial institutions and lenders to determine the value of a distressed property that is about to experience foreclosure or a short sale. Real estate agents write these reports based on local market data, such as recently sold homes and the current inventory of homes on the market. A BPO report is not necessarily difficult to write, but it does require intensive research, often including a property visit, and accuracy is of the utmost importance. Among the information needed to write a BPO report is the size of the home, its condition, and the prices of comparable homes in the area.

A BPO report is usually created by a real estate agent hired by a bank or mortgage lender to determine the value of a property that is in the financial lender’s portfolio. This is often the case when a distressed property is facing foreclosure because of late payments. In this scenario, the lender will look to obtain a BPO report to avoid the cost of getting an expensive appraisal on a property that is already losing money because of its delinquent status.

Writing a BPO report is usually a simple task for an experienced broker. There is an enormous amount of data that needs to be collected to put together a complete BPO report, but this data may not be readily accessible depending on the home and neighborhood. The BPO report will require the realtor to visit the property and collect all pertinent information related to the property, including the total living space of the home, number of bedrooms and bathrooms, repair estimates and photographs. Once the realtor has acquired this information, he will need to evaluate the neighborhood and the other comparable properties that have been sold in the area. By collecting this data, the broker can write a report that informs the reader about the property’s value and the factors that determined the value.

A BPO report is essential to the successful management of a financial institution’s real estate portfolio. As banking and financial institutions become aware of delinquent properties, it is important that they be able to determine property value quickly and at a reasonable cost. In doing so, lenders can determine the best course of action in resolving the delinquent real estate mortgage through a variety of strategies, including foreclosure or allowing the property to sell for less than the mortgage’s value, known as short sale.

Asset Smart.

[ad_2]