What Is a Broker Price Opinion BPO Definition and How It Works
Betsy has a background in international finance and has developed her journalism skills through her experience in academia and professional services.
A broker price opinion (BPO) is an estimated value of a property determined by a real estate broker or qualified individual. It is based on the characteristics of the property and does not represent an official appraised value or market value.
Not all states allow broker price opinions. Laws may prohibit brokers from providing this service or charging fees for it. Brokers may receive training to conduct price opinions, but it may not be legal for them to offer this service. State laws may restrict the use of broker price opinions to specific situations.
Factors considered when determining a price opinion include the value of surrounding properties, neighborhood trends, property location, comparable listings, recent sales, and any associated costs for repairs or sale preparation. It’s important to note that a broker price opinion is not the same as an appraisal.
Key takeaways:
– A broker price opinion is an unofficial assessment of a property’s potential market value.
– It is based on qualitative and subjective factors such as neighborhood characteristics and market conditions.
– It may be sought by potential homeowners, sellers, or mortgage lenders before conducting an official appraisal.
A broker price opinion may be requested by a lender for purposes such as refinancing or foreclosure assessments. Property owners may also seek this opinion for sale or refinancing purposes. Broker price opinions are often preferred due to their lower cost and quicker turnaround time compared to appraisals.
Brokers can provide a drive-by price opinion by only assessing the property’s exterior without entering the residence. An internal price opinion involves authorized access to the home to review its condition and amenities, including taking photos.
Aside from the possibility of payment, brokers may submit a price opinion to win the listing they are assessing. They may include a marketing plan to demonstrate their approach to representing the property. Broker price opinions are considered concise alternatives to comparative market analysis.
