Re: What are BPO’s - Broker Price Options - Posted by Glynn-TX
Posted by Glynn-TX on March 13, 2002 at 15:00:12:
A Broker Price Opinion, (BPO)is an estimate of value based on the sale of comparable properties in the same area. Banks/Mortgage companies want to know what a property is worth after it goes into default, but before it goes into foreclosure. Not all properties in default will go to foreclosure, most are cured by the homeowner or sometimes fast-moving investors. Therefore, the banks would rather order a $50 BPO than a $400 appraisal. Makes sense for the bank as a BPO done by an experienced broker will be within 5% of a full-blown appraisal. As neither BPO’s or appraisals are an exact science, only time will tell who is closer to the selling price. Incidently, although JoeS claims brokers do not have to justify the value they assign to a property, I have had to submit comps and photo’s for every one of the over 800 BPO’s I have completed in the last five years whether they were done for HUD, VA, REONationwide, Vitalizers or any of the other thirty-plus clients I worked for.