A broker price opinion (BPO) agent determines the fair market value of a property for mortgage companies, loss mitigation companies, or financial institutions. They consider factors such as the property’s condition, selling price of similar homes, and necessary repairs. BPOs are faster and cheaper than appraisals, but their validity is debated. BPO agents should have a real estate license and remain unbiased.
A broker price opinion (BPO) agent is a neutral third party hired to help establish the current fair market value of a specific property. These agents are typically realtors hired by a mortgage company, loss mitigation company, or financial institution. Providing an opinion on the broker’s price is faster and cheaper than carrying out a full assessment. A BPO agent will make a property value determination based on several factors. With duties similar to licensed property appraisers, BPO agents use knowledge of other properties sold in an area to help determine a property’s value.
A property appraisal serves the same purpose as a BPO, except that appraisals tend to involve a more detailed inspection and are handled by licensed appraisers. Banks will use a BPO agent because it costs less and can usually be done much faster than a traditional assessment. There is debate about the validity of using a BPO over a traditional property valuation; however, when economic times are tight and foreclosure rates are high, BPOs can be done faster than an appraisal. This is especially valuable when a bank wants to “short-sell” a property within 30 to 90 days. BPO agents can also perform a property appraisal when homeowners wish to refinance their mortgage at a lower interest rate.
The basic factors that a BPO agent considers when doing a property appraisal are the current condition of the property, the selling price of similar homes in the surrounding area, and what repairs may be needed to get the home sold as quickly as possible. . Most BPO agents provide an exterior property report that includes photographs of the home, property and neighborhood. They look for obvious external defects or problems and use this information to estimate the interior condition. Adjustments such as the need for a new roof, an extra bathroom, or better views are also considered by a BPO agent when determining a property’s fair market value.
Most companies prefer a BPO agent to have a real estate license, some experience in the local real estate market, and knowledge of the neighborhood they are working in. As licensed property appraisers, a BPO agent is expected to remain free from any influence from any party with an interest in the property transaction. Real estate brokers and agents who work with a current license are the natural choice to fill the duties of a BPO agent.
Protect your devices with Threat Protection by NordVPN
