The Broker Price Opinion or BPO

BPO or Broker Price Opinion is a method utilized by mortgage lenders, mortgage companies to assess properties in situations wherein they think that the expense and deferral of an appraisal is not required. BPOs are frequently related with foreclosures and short sales, except other companies such as relocation firms order BPOs. A BPO involves using a process very similar to an appraisal. There are few reasons financial institutions utilize a real estate broker for a BPO. First, to prevent the cost of an appraisal; Second, to avoid delinquent payments and awaiting foreclosure; And lastly, to possibly offer a refinance situation to the borrower. Companies appoint a real estate broker to plan an opinion of value. The agent of the broker, usually a real estate agent, compares three similar properties that have recently sold to the subject property and adjusts up or down for differences. This would serve as the final result in an opinion of market value. Broker price opinions are most of the time controversial particularly if the agent who is planning the BPO does not have enough knowledge or experience concerning the neighborhood. Nevertheless, BPOs normally cost less than a full-blown appraisal. Broker price opinion is also known as real estate agent appraisal. The lender may choose to hire a real estate broker to do a BPO in order to decrease costs. BPO allows them to obtain a reliable estimate of the latest value of the property, compare it to the mortgage balance, and propose solutions.