BPOs have a proven track record of reliability and accuracy, and their use has been established in the mortgage lending industry by banks, lenders, and all major loan servicers.
Because of their intimate knowledge of the local real estate market, real estate brokers and agents are often the most well-informed and relevant sources of real estate pricing information, especially for BPOs. In particular, they are an integral part of estimating the cost of a loan modification versus a foreclosure by providing the expected REO disposition price of a property.
According to studies released by valuation companies and industry participants, BPOs are comparable to appraisals in accuracy and often provide a more appropriate viewpoint in a timely and cost-effective way. REVAA members and financial institutions require that BPOs meet stringent quality assurance metrics before they are accepted, and numerous industry groups promote BPO training, certification, and standards.
What is a BPO?
A Broker Price Opinion (BPO) is an estimate from a real estate professional of the probable sales price for an identified parcel of real property.
A BPO typically includes an inspection of the subject property, relevant neighborhood analysis, local and regional market information and trends, and a description of comparable properties.
BPOs are used in the mortgage industry by banks, lenders, major loan servicers, investors and regulators as a necessary valuation tool in today's mortgage marketplace.
How does a BPO differ from an appraisal?
BPOs are used for loan modification transactions and loss mitigation purposes, including foreclosure avoidance. BPOs are not used for primary residence mortgage transactions.
Reliable and accurate. BPOs are conducted by real estate brokers and agents who are typically the most well-informed and relevant sources of real estate pricing information in most communities.
Timely Service. BPOs are generated and delivered in 1-4 days, rather than 1-2 weeks for a basic appraisal.
Cost-effective. BPOs typically cost less than an appraisal.