What is a BPO?

By
Real Estate Agent with Long & Foster REALTORS®, Gainesville, VA VA License # 0225089470

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.

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Re-Blogged 3 times:

Re-Blogged By Re-Blogged At
  1. Melissa Zavala 08/24/2009 06:44 PM
  2. Renée Burrows 08/24/2009 06:46 PM
  3. Pat Fenn 08/25/2009 06:39 PM
Topic:
Home Selling
Location:
Virginia
Groups:
Short Sale REALTORS®
Short Sale Support Group
Tags:
what is a bpo
short sale bpos
short sale realtor
prince william county short sale realtor

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Ambassador
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Melissa Zavala
Broadpoint Properties - Escondido, CA
Broker, Escondido Real Estate, San Diego County

Great, simple post. Perfect for the consumer with questions. I just reblogged it :-) Thanks for allowing the reblogging!

Aug 24, 2009 06:40 PM #1
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Renée Burrows
Savvy Home Strategies Realty, LLC-REALTOR®-Estate-Probate - Las Vegas, NV
Las Vegas Real Estate Broker - www.urLVhome.com

I am going to reblog also!  I have to explain these things all the time ;)

Aug 24, 2009 06:41 PM #2
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Chris Ann Cleland
Long & Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Northern VA

Melissa & Renee:  Thanks for the reblogs.  A nice compliment and completely unexpected.

Aug 24, 2009 06:48 PM #3
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Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

Terrific, clean cut explanation Chris Ann. Sometimes I think the BPO's are more accurate in the market than an appraisal.

Aug 24, 2009 07:03 PM #4
Rainer
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Amy Salisbury
Leading Edge Properties - Charles Town, WV
West Virginia Realtor/Jefferson/Berkeley

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.

Aug 24, 2009 07:13 PM #5
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Cindy Jones
Integrity Real Estate Group - Woodbridge, VA
Pentagon, Fort Belvoir & Quantico Real Estate News

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.

Aug 24, 2009 07:19 PM #6
Rainmaker
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Richard T. Dolbeare
Keller Williams Realty - Lihue, HI
R(B), ABR, CRS...Hawaii Multi-Island Specialist

We have big issues with agents doing BPO's here in Hawaii and most have stopped doing them.

Aug 24, 2009 07:20 PM #7
Rainer
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Sharon Richards
Kirsten Realty Tampa Florida - Tampa, FL

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.

Aug 24, 2009 08:06 PM #8
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Chris Ann Cleland
Long & Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Northern VA

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.

Aug 25, 2009 10:39 AM #9
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Chris Ann Cleland
Long & Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Northern VA

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. 

Aug 25, 2009 10:40 AM #10
Rainmaker
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Liz Loadholt
Liz Loadholt- AgentOwned Realty- Covering SC - Mount Pleasant, SC
Realtor--Broker-in-charge - Trainer--Relocation Director Covering SC

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.

Mama Liz's Signature

Aug 25, 2009 03:27 PM #11
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Chris Ann Cleland
Long & Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Northern VA

Liz:  We use so many terms and acronyms that it may make our clients' heads spin. 

Aug 25, 2009 05:50 PM #12
Rainmaker
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Anne Clark
Metro Referrals - Gainesville, VA

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.

Nov 16, 2010 11:34 PM #13
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Chris Ann Cleland
Long & Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Northern VA

Anne:  I've used this post over and over to explain it to my Short Sale Sellers.

Nov 16, 2010 11:54 PM #14
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Chris Ann Cleland

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