is a report that is performed by a licensed real estate agent, broker or appraiser. It is similar to doing a CMA (Comparative Market Analysis) but most times the real estate professional gets paid to do a BPO. A BPO can be either an Exterior Drive-By or a Full Interior report. When doing a BPO, the real estate pro researches the subject property, they take pictures of it, they also scope out the neighborhood as well as pull 6 comparable properties (3 Active Comps and 3 Sold Comps) in their MLS (Multiple Listing Service). They then take all of this information, the pictures they took of the subject and their knowledge of the local real estate market and they input it into a BPO form. The final BPO is used to support their professional opinion that will help determine the potential selling price

Broker price opinions are initiated by financial institutions.1Examples arebanksmortgagecompanies, andloss mitigationcompanies.345

The BPO is performed by a real estate professional who is acting on behalf of the financial institution.1Such a professional could be areal estate agent, areal estate broker, anappraiser, or other qualified person.21Through BPOs, real estate professionals can improve their skills in property inspection, market knowledge, evaluation, and property pricing.6At a price of US $30$100 per BPO,5the work can provide side income or steady income for real estate agents.1Agents may also create working relationships and a rapport with financial institutions.17Some BPO agents work through aBPO companythat provides a single point of contact to the client and oversight of agents and their reports.1

situations that do not support the cost or time of a full real estate appraisal

appeal to cancellenders mortgage insurance(LMI or PMI)

assetevaluation andbookkeepingby financial institutions

a selling or purchase price for an individual property

or a portfolio of home loans (sometimes for thousands of loans)

A real estate agent or a broker is hired to complete a BPO report on a property. A BPO may be occasionally requested without a fee in hopes that the financial institution, bank, or lender will receive a sales listing for the property.1

The BPO professional then conducts the investigation. Many factors affect the price of a property:

characteristics of the individual property, such as structure type, size, room use, age, lot size, and parking

how the property fits into the immediate neighborhood

values of similar properties in the surrounding area

the amount of cleaning, repair, and preparation needed to make the property marketable

The result is a brief report, usually two or three pages in length. This report includes analysis of the property and neighborhood, photographs,comparable properties(comps), and local and regional market information.110

A broker may do a drive-by BPO or an interior BPO.3In drive-by BPOs, the professionals do not have access to the interior of the property;5they rely on exterior appearance, neighborhood information, comparables, and other documentation.10The interior BPO is more in-depth; it requires the agent to make contact with the borrower or point of contact (POC) to schedule inspection, and when arriving the agent looks the property over and notes all repairs needed to bring the property to average condition fair market value (updates and upgrades are not allowed, unless the agent can show that the local market calls for updates or upgrades ie granite countertops stainless appliances and hardwood floors). A photo of the front, rear and both sides of exterior are taken, as well as a photo of each room of the interior, as well as all mechanicals and appliances. When completing the report, value is chosen for 30 day quicksale, and 6090 day values, and a suggested list price for each is calculated based on market conditions and list to sale ratio for that market. The repaired fair market value is then reduced by itemized repair costs to find the as-is value.511

In anautomated valuation model(AVM), a computerized mathematical model evaluates basic features of the property, compares to area sales, and determines a rough value. The calculation takes into account information about property size, bedrooms, and bathrooms. An AVM is a basic evaluation just to make sure that the property value is in the right ball park and may be replaced by a full real estate appraisal.9Because an AVM does not involve a site visit, it does not include factors such as condition or upgrades.8

An individual who is looking to sell or purchase a home might request that an agent perform a comparative market analysis (CMA)8to determine a reasonable listing price or offering price.12The process of deciding a CMA price is similar to a BPO.1However, a BPO whether the exterior drive-by BPO or the full interior BPO is more thorough than most CMAs.13

Unlike a BPO professional, areal estate appraisermust be licensed or certified in most countries. A BPO is less thorough than an appraisal.citation needed

Only a licensed or certified Appraiser can execute a valuation or an appraisal.14

BPO Defined. National Association of Broker Price Opinion Professionals (NABPOP)

Kimmons, James.All About The BPO or Broker Price Opinion. About.com

Kimmons, James.When is a BPO or Broker Price Opinion Used?: Who Might Call You for a BPO and Why. About.com

Kimmons, James.The Two Major Types of BPO or Broker Price Opinions: What Are Drive By and Internal BPOs?. About.com

Income doing Broker Price Opinions BPOs; Increase Skills as a Real Estate Professional. National Association of Broker Price Opinion Professionals (NABPOP)

Ventolo, William L., Jr.; Williams, Martha R. (1992).

The Art of Real Estate Appraisal: Dollars and Cents Answers to Your Questions

(Paperback). Dearborn Financial Publishing Inc. pp.2573.ISBN

Realtors® Should Embrace Online Data, Educate Consumers about Valuations(Press release). New Orleans: National Association of Realtors. 8 November 2014.

During my mortgage loan application process, I was given three or four different valuations. What do all the different valuations mean?.

.Consumer Financial Protection Bureau. 5 May 2014

Kimmons, James.What is Involved in a Drive By BPO or Broker Price Opinion? The Drive By BPO is a Bit More Than the Name Implies. About.com

Kimmons, James.What Is Involved in an Internal BPO or Broker Price Opinion?. About.com

Responsible Valuation Policy. National Association of Realtors. 16 February 2012.

Kimmons, James.NABPOP The National Association of Broker Price Opinion Professionals: A Professional Association with Training and Certification. About.com

Uniform Standards of Professional Appraisal Practice

Articles with unsourced statements from February 2015

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