What is a BPO, and what does a BPO Agent do?Posted On: December 2011
ASK AN ILLINOIS REALTOR, WITH TIFFANY BREWINGTON
I recently listed my house for short sale, and my lender told me a “BPO agent” will be coming to view the interior and exterior of my home. What is a BPO, and what does a BPO Agent do?
The BPO, or Broker Price Opinion, is a property valuation report similar to a CMA (comparable market analysis) which is prepared by a licensed real estate agent for a lender or asset management company. The asset management company uses the BPO in situations where they believe the expense or time delay of an appraisal is not necessary. They are often used in a case where the owner(s) of the subject property are delinquent in their mortgage or lease payments, or the property may have already begun the foreclosure process. They may also be used in a case where the homeowner is trying to refinance into a lower interest rate, and a recent full appraisal was performed. The lender may do a BPO in lieu of an appraisal to save costs.
What is the purpose of a BPO?
A BPO helps the lender determine an estimate of the current market value of a property, regardless of what a homeowner may owe the lender(s) on their mortgage statement. The goal is to determine the probable selling price of a home. For example, if a homeowner is behind on their mortgage payments, then the bank may use a BPO to determine whether the property should go into foreclosure or not. A BPO may also be used in a case where a property is already in preforeclosure, but the homeowner has listed it for sale. Then the BPO helps the bank determine how much they need to net on the sale, or the bottom line as to what they will accept from a potential buyer.
What is required of the BPO agent?
A “BPO agent” is a licensed real estate professional that is usually local to the area of the home they are visiting. They are hired by the lender or asset management company. They will be required to do some field work by visiting the property and performing either an outside and/or inside valuation with the purpose of establishing a current market value of the home. Duties may include taking exterior and interior photos, gathering comparable property sales information from public records and other external data sources, including sold properties and current properties on the market, and gathering information on foreclosure activity in the area. The agent may also note needed repairs and investigate the condition of the home. Real estate agents typically have just a few days to complete the BPO valuation and send or email the information over to the lender.
Can I help the Real Estate Agent with the BPO for My House?
Banks need a neutral third party to be free of influence on the valuation of the home, which is why they hire real estate agents and not their own employees to do the BPO. Influencing the BPO agent is a no-no, although if there are hidden details which may affect the value of the home, then they are important to point out to the agent. Therefore educating the broker on those important facts may be appropriate. BPO’s
About the Author: Tiffany Brewington is an Illinois Licensed Realtor with Chicagoland Residential Realty. Have a foreclosure or real estate question? Contact her here
Posted On: December 2011
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