What is a BPO? As a Short Sale Listing Agent I am asked that at least once in every transaction by my short sale 
sellers.
So what is a BPO? What does BPO stand for?
BPO stands for BROKER PRICE OPINION
A BPO is often ordered in lieu of an appraisal by mortgage holders when they are trying to determine the current market value of a short sale property. A BPO is cheaper than an appraisal because you can hire a Licensed Real Estate Agent to do one for $50-$100. A licensed appraiser charges $400.
BPO's give three ACTIVE listings and three SOLD listings within the last 60-90 days. The Real Estate Agent will figure out what the short sale property is worth based on these six listings, which should be as similar as they can find to the subject property.
A BPO is also known as a CMA (Competitive Market Analysis). Once the mortgage holder has a value of the short sale property, they are able to determine whether or not to approve the short sale contract.
Chris Ann Cleland, Associate Broker- Licensed in Virginia, GRI, SFR, Northern Virginia Short Sale Specialist. Affiliated with Long & Foster, 7526 Limestone Drive, Gainesville, VA 20155. To contact Chris Ann, call 703-402-0037 or email chrisann@LNF.com. Or you can visit her website: www.nvarealestate.net.
Header is a combination of photos from the Bristow, Gainesville & Haymarket areas, taken by Chris Ann Cleland.
Great, simple post. Perfect for the consumer with questions. I just reblogged it :-) Thanks for allowing the reblogging!
I am going to reblog also! I have to explain these things all the time ;)
Melissa & Renee: Thanks for the reblogs. A nice compliment and completely unexpected.
Terrific, clean cut explanation Chris Ann. Sometimes I think the BPO's are more accurate in the market than an appraisal.
Chris Ann, What a concise and accurate definition and explanation of the term BPO! Unfortunately, in the state of West Virginia, it is illegal for a broker to be paid for a BPO. Brokers may do them in hopes they will get the listing, but cannot be compensated for this service.
And I whole-heartedly agree with Gary, above. Not always, but oftentimes, an accurate BPO is a much better assessment of resale value than an appraisal. Given the issues we're seeing with out-of-area appraisers during the loan process, the last thing banks need on their REO properties is innaccurate valuations.
I noticed Pat left you a comment about the agent she talked to this weekend that had never heard of a BPO but she had a short sale listing. Scary that this far into the short sale and foreclosure mess that an agent has no clue.
We have big issues with agents doing BPO's here in Hawaii and most have stopped doing them.
Chris Ann - Great Post - Yes, that question is asked all the time. I also agree with Gary and Amy that BPO's are sometimes more accurate.
Gary: I think they can be if an agent knows the market and what they are doing. I have seen a few agents that are living off of BPOs and have no clue what they are doing. That scares me.
Amy: A shame you all can't be compensated for them. Then again, you're probably too busy selling real estate to do them.
Cindy: It is downright scary to hear something like that, isn't it? I have to say, nothing surprises me in this business.
Richard: You should elaborate. What type of issues are you seeing in HI?
Sharon: I'd say they are more accurate about 85% of the time.
Chris Ann --- I agree with the others --- this is such a clean concise explanation of a BPO -- so many people don't have any idea. Thanks.
Liz: We use so many terms and acronyms that it may make our clients' heads spin.
Good explanation of a BPO. It's funny the way agents throw terms like this around and think nothing of it since we hear them all the time.
Anne: I've used this post over and over to explain it to my Short Sale Sellers.