Broker Price Opinion's -- the 411

What are these agents doing outside taking pictures of your neighbors house...? BPO’s! 

What are BPO's?

BPO is an acronym for Broker’s Price Opinion.  In general, the term Broker’s Price Opinion (BPO) is a method that a Real Estate Broker (or an agent acting on behalf of their employing broker) uses to estimate the selling price of a house.  The price estimate is submitted in a BPO report (2-3 pages) that includes local and regional Real Estate market information, neighborhood analysis, and (comps) properties that compare to the (subject) house that is being priced.  This method of estimating a price has similarities to a Certified Market Analysis CMA, like an agent would provide for a seller who is looking to list/sell their property.

Performing a BPO, means that a Real Estate Professional (agent, broker, or appraiser acting in an agent/broker capacity) is requested by a financial institution or third party to submit an estimate of a selling price for a property in a BPO report for a fee. The report will include either making interior access and photos of each room or what is called a drive-by and photos can be taken from the street within the real estate professionals vehicle then comparable properties in the neighborhood are researched and various information complied to obtain the property value. 

 BPO's can be done for the following situations:

      • home equity lines of credit

      • home equity loans

      • requests to remove PMI - Private Mortgage Insurance

      • REO/Foreclosures, short sales

      • due diligence for investors or investment bankers

      • Any other reason that a bank/lender needs to make a financial decision on a property

Qualifications for performing a BPO:

A Real Estate Professional with an active license including:

      • agents/salespeople (REALTORS)

      • brokers

      • appraisers (acting in an agent/broker capacity)

Professional within the direct market area of the subject BPO-- meaning the agent/broker should not be completing an order on a property where they do not conduct regular business.

What is the BPO industry?

A Broker Price Opinion BPO is an excellent means of information for banks and lenders to make financial decisions on residential properties. Due to the financial practicality and quick turnaround time of a BPO, banks and lenders order BPOs from a group of registered/approved Real Estate professional to complete the BPO which can take some time to be approved and most have strict requirements to work for as independent contractors.

What is a BPO Company?

A BPO Company acts as a clearing house for banks and lending institutions by contacting Real Estate Professionals and assigning BPO jobs to them, tracking and expediting BPO job status, and providing quality assurance/oversight for submitted BPOs from the Real Estate Professionals. A BPO Company is either a division of a financial institution/bank or a standalone company. This company is essentially a middle man between the financial institutions such as banks/lenders and BPO practitioners.  BPO Companies qualify and maintain a list of Real Estate Professionals.  They also gather the BPOs that are submitted from the Real Estate Professionals, ensure BPO accuracy, and submit the QC’d BPOs to the banks/lenders.

So don't be scared if someone is driving down the street snapping photos or standing in a front yard camera flashing like lightening-- Probably just a real estate agent ;)