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What is a BPO, and why is it used?
What’s a BPO, and why is it used?
Common questions I receive as a real estate broker surround short sales, and more specifically, the steps taken to complete the short sale process. A BPO is a very important step in the short sale process because it gives the lender an idea as to whether the offer that’s been made by the prospective buyer is a fair one. What’s a BPO, and why is it used? A BPO is a “Broker’s Price Opinion,” and it’s used by the existing lender, or lender’s, to determine a fair market value for the home that’s being sold. Let’s say that your lender is located in Pennsylvania or Maine, but your home is located in Glen Ellen, Ca. or maybe even Miami, Fl. It’s not realistic to expect an asset manager or negotiator from the bank to know and understand the intricacies of your particular real estate market so they’ll hire a third party to offer his/her opinion of value. This is of great benefit because computer valuation models are only as good as the data they have to draw off of and sometimes the data used to determine true market value isn’t something that can ... more
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