Broker Price Opinion
What is a BPO?
A Broker Price Opinion (BPO) is an unofficial assessment of a property’s potential market value based on expert judgment. It is often based on qualitative and subjective factors such as neighborhood characteristics, curb appeal, and market trends. A BPO is not representative of an official appraisal and may be used for different purposes, such as buying or selling a home, refinancing a mortgage, or getting a loan.
A BPO is performed by a real estate broker or other qualified individual or firm. The broker will consider various factors when developing a price opinion, such as the value of similar surrounding properties, sales trends in the neighborhood, the location of the property, and its place among its surroundings. Comparable listings and recent sales also affect the price opinion for a property. Brokers will also take into account an estimate of any of the costs associated with getting the property ready for sale and/or the cost of any needed repairs.
It is important to note that a BPO is not the same as an appraisal. A BPO is an unofficial assessment of a property’s potential market value based on expert judgment, while an appraisal is an official estimate of a property’s value based on objective criteria such as recent sales of similar properties, the property’s condition, and the local real estate market.
Michele Bryan has been doing BPOs for over a decade, beginning with the economic downturn in the early 2000s.
BPOs are very similar to a Comparable Market Analysis. They each estimate property value based on the current market data from active and sold listings. It is important to understand the different offerings now available to determine market value. For example, because of their low cost and fast results, an Automated Valuation Model (AVM) with a property condition report could be an ideal solution for borrowers with high credit scores and low loan-to-value (LTV) ratios. As the risk grows, other more in-depth and human-powered solutions like a broker price opinion (BPO) or hybrid appraisal would better fit the risk. For higher LTV (Loan to Value) transactions and borrowers with adverse credit, more traditional solutions like a full 1004 appraisal may be needed. The key to an effective strategy is to match the appropriate valuation method to the transaction risk, and a good valuation partner can help advise on this strategy.
Feel free to order a BPO (starting at $150) or you can schedule a free consultation with Michele Bryan by clicking the button below.