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A BPO or Broker Price Opinion, is a tool used by mortgage lenders, banks and others to value the property in the current market. Agent/Broker must adhere to the guidelines and standards of BPO Standards Board (BSB). BPOSG is a compilation of standards and guidelines for the Broker in the Price Opinion Industry. BPO Customer specifications overrides the guidelines set forth by the BSB.
The reasons and timing for using a real estate broker for a BPO might include.
- The Cost of an appraisal is avoided
- Delinquency payments and pending foreclosure
- Refinance Situation
- Resale by borrowers
Definition of a BPO. BPO's are often associated with foreclosures an short sales, but other companies such as relocation firms order BPO's. A BPO stands for "Broker Price Opinion" and it invoices using a process similar to an appraisal.
Companies hire a real estate broker to prepare and opinion of value. the representative of a broker, generally a real sate agent, compares a number of criteria, which include comparison of three like-kind properties, recently solds and listing with adjustments up or down depending on amenities. Broker/ Agent must maintain full objectivity and maintain fiduciary responsibilities to the organization that ordered the BPO. The final result is the "opinion" of final value.
Broker price opinions are sometimes controversial, especially if the agent preparing the BPO has little experience or knowledge. about the neighborhood and surrounding areas. BPO's cost far less than actual appraisal.
Two Category Types of BPO's:
The types are Drive-By BPO and an Internal BPO. The Name "Drive By" implies the extent of the BPO, but the task and form requirements can vary from BPO type. Of Course, in general the drive by BPO will not require the broker to get out of their vehicle nor go in to the home.
The Internal BPO can also vary in tasks and form requirements. It is definitely more involved, usually require many more photos. This BPO also requires contact with the homeowner or tenant for access whether it is a short sale, foreclosure or fair market BPO.
Ethics and Conduct
Broker/ Agent must adhere to all provisions of the Civil Rights Act of 1968 ( Fair Housing), as amended, which prohibits discrimination in the sale, rental, and financing of dwellings, and in other housing-related transactions, based on race, sex, national origin, religion, sex, familial status, ( including children under the age of 18 living with parents or legal custodians, pregnant women, and people securing custody of children under the age of 18), an handicap (disability)
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