This can include taking photos of the property. In addition to the possibility of being paid to provide this service, brokers may submit a price opinion in the hopes of winning the listing they are assessing. The broker might include a marketing plan for the property when they issue a price opinion to show how they would approach representing the property.
Broker price opinions have been regarded as concise alternatives to comparative market analysis. Home Ownership. Purchasing A Home. Your Privacy Rights. To change or withdraw your consent choices for Investopedia. At any time, you can update your settings through the "EU Privacy" link at the bottom of any page. These choices will be signaled globally to our partners and will not affect browsing data. We and our partners process data to: Actively scan device characteristics for identification.
I Accept Show Purposes. Your Money. Personal Finance. Your Practice. Popular Courses. Home Ownership Purchasing A Home. Key Takeaways A broker price opinion BPO is an unofficial assessment of a property's potential market value based on expert judgment. A BPO is often based off of qualitative and subjective factors such as neighborhood characteristics, curb appeal, and if the market is 'hot' or not. A BPO may be sought by a potential client in buying or selling a home, or from a mortgage lender before they initiate an official appraisal.
Last Updated on October 14, by Mark Ferguson. I also complete paid BPOs on many properties that are not my listings. It takes time to learn to complete a good BPO in a timely manner. A BPO is a report compiled by a licensed real estate agent that is similar to an appraisal. A BPO is not an appraisal and appraisals can only be completed by licensed appraisers.
In fact some states have made it illegal for real estate agents to complete BPOs, so always check with your state laws before completing BPOs. When I complete BPOs I can finish the report in about 20 to 30 minutes and that includes pulling comps and entering data. I have done thousands of BPOs and I am much faster than most people who are just starting out.
At this point in my real estate career I have my assistants complete the BPOs and they have gotten as fast as me. When they first started to complete BPOs it would take them over an hour in many cases to complete the report. As my team did more and more BPOs they got faster and faster completing the reports. They learned to pull comp data quicker, enter data quicker and write comments quicker.
If you can complete the report in 30 minutes or less and you are getting a lot of orders, you can make a good living completing BPOs. Driving to complete inspections on BPOs can take up a lot of time. If you are getting one or two orders a week and the properties are 20 miles away that is a lot of time and gas.
You have to make sure you are considering the drive time when you accept BPOs. I would not accept orders over 30 minutes away unless the BPO company would agree to pay more or I had multiple orders in the same area. When I started getting a lot of orders I would wait a day or two to complete pictures so that I could drive by as many properties as I could in one trip to save time. Some companies pay less and some pay more. In some cases the properties will be in very rural areas and the BPO companies will be willing to negotiate.
If you are doing interior inspections you have to be a licensed agent. It takes time to build up business, find clients and prove you can do a good job. They do not get paid for doing the BPO, because it is considered part of the job of listing the property.
If you do an awesome job completing BPOs for a company, you will have the best shot of selling REOs for them if they need an agent in your area. There is a pretty small chance the owner of the property whether it is a bank, hedge fund, or the government will use the agent just because they completed a BPO, but it had happened. Getting your name out there as much as possible is one of the best ways to get REO clients.
One of the biggest challenges for agents to get REO business, is the banks and asset management companies want to use experiences REO agents. The kit comes with video training, a detailed guide on how to get REOs and a list of companies to sign up with. I just added a brand new guide that shows you exactly how to complete an awesome BPO, which is included.
Also if there is any trash or unneeded items that should be removed the property. Since a BPO is the opinion of a real estate broker agent, a comparison between the property in question and those which are similar is required. Review the current market for at least 3 properties that are of the same size, age and style. Additionally, review properties on the same street and in the same neighborhood. Compare the properties and determine a fair market value for the home which is being inspected.
Record all of the necessary information on the BPO forms and sign the bottom of the documents, if required. Return the documents to the lender or mortgage company and submit the photographs of the property. Once the documents are filed, the lender or mortgage company will complete the process of authorizing the broker price opinion.
Although it is cheaper for lenders and mortgage companies to have a real estate broker perform a broker price opinion, the BPO is nearly as thorough as an actual appraisal. When completing a broker price opinion, follow the steps carefully or the inspection might not be considered valid. Download list of over BPO Companies. BPO Software. Look No Further.
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