BROKER'S PRICE OPINION

By
Real Estate Agent with OC ShortSale Arena

The Broker's price opinion (BPO) is the central point in a short sale evaluation. In most markets, prices are trending downward. The banks and lenders only have one way to determine whether they should sell the home now at a loss or hold it and sell it on their own. This is called the 'BPO', or "Broker's Price Opinion. It's basically a very fancy CMA.

Remember, the BPO is not based in any way on what the seller OWES.

The banks are not in business of owning Real Estate. They are in business for lending money for others to own real estate. With that being said, the banks do not make foolish business decisions. The bank would rather take a small loss now rather than a larger one later. It's simply a business decision.

The manner in which the lenders detemine whether they should accept an offer, reject the offer or counter it is all based on the BPO. With the BPO taking such a critical role in whether the deal will get approved or not, this suggests that the Agents 'price' the house correctly using a few standard formulas. Always try to compare Apples to Apples: three sold comps and three active comps. The bank will do a BPO without feelings, care, thoughts: do not try to humanize the BPO. The bank only cares about the numbers. When you do your BPO think like the bank. This provides you with the opportunity to price the property correctly.

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the music-note to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Tags:
orange county
short sale
specialist
bpo

Comments 9 New Comment

Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the music-note to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Rainmaker
629,967
Don Rogers
Realtor, Broker, CDPE, GRI, OnullFallon MO & St Charles County MO homes
Keller Williams Realty Chesterfield

Ezra, Thank you for the post.  The bank wants the opinion of the realtor(r) as to the value of the property and when I do them that is what they get and it is always apples to apples.  Welcome to AR and as other have said good first post. :-)

Don R.

April 18, 2008 04:13 AM
Rainer
60,698
Dorene Shirley
Silicon Valley Real Estate
The Mortgage & Property Connection

Ezra - Welcome to the Rain, make sure that you browse the site and become familiar with everything this site has to offer.  The more you browse the more you will learn.  I have found this site to be really helpful to me.  If you have any questions, please don't hesitate to email me, I will do whatever I can to help.

http://www.doreneshirley.com/

April 18, 2008 06:54 AM
Ambassador
1,449,246
Renée Burrows
Las Vegas Real Estate Broker - www.urLVhome.com
Savvy Home Strategies Realty, LLC-REALTOR®-Estate-Probate
I do think that sometimes the third party companies try to humanize it with things that are not possible with "clarification requests".  Some seem to be in denial on the true value of a property.
April 18, 2008 08:07 AM
Rainmaker
863,826
Michael Setunsky
Your Commercial Real Estate Link to Northern VA
Michael's Commercial LLC

Ezra, I think you captured the essence of doing a good BPO. BPO's are something that shouldn't be taken lightly when putting them together for the bank, relo company, etc. Thanks for sharing.

Good Post!

April 18, 2008 08:22 AM
Rainmaker
557,411
Keith Elliott Jr
Principal Broker/Owner
KEIRE Realty Group

Hello Ezra,

Welcome to Active Rain and congrats on your first post! The opportunities to learn and network are incredible here. Best of luck to ya!

-Keith

April 18, 2008 11:11 PM
Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the cat to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Rainer
5,527

Ezra Sturgis

Ask me a question
*
*
*
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the airplane to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase: