Broker Price Opinion
Broker Price Opinion refers to the process used to obtain property values. Mortgage lenders and bank loss mitigation departments utilize BPO reports in lieu of traditional property appraisals to obtain estimated property values of real estate which is entering into foreclosure or when borrowers wish to obtain a loan modification.
Broker Price Opinion is not the same as a traditional property appraisal. As the name suggests, the appraised value is an opinion based on a variety of predetermined factors. These can include the area where the property is located, square footage of the home, lot size, and the condition of other homes in the area; including the percentage of foreclosure or bank owned properties.
Two types of Broker Price Opinions exist - Drive-by BPO and Internal BPO. Both are used by lenders to obtain property values and estimated repair costs to prepare the real estate for sale or extend the terms of the mortgage note.
Drive-by Broker Price Opinion requires the services of a real estate broker who drives by the house to gather information regarding the property and its location. The broker provides a detailed report to the mortgage lender which includes estimates of the square footage, number of rooms within the home, and lot size.
Drive-by BPOs also include information about the neighborhood, zoning laws and regulations of homeowner's association, if one exists. BPOs outline the external condition of the home, approximate age of the property and available parking. Brokers take photographs of the property and surrounding area which are submitted along with the report.
Internal BPOs require brokers to enter the home to take measurements, review the condition of walls, ceilings, flooring, countertops, appliances, fireplace and working condition of heating and air conditioning units. Brokers are also required to inspect roofing, gutters, siding, external fencing and swimming pools and hot tubs.
Internal Broker Price Opinions are used when borrowers wish to refinance their home loan, obtain a loan modification, or when the lender needs to determine the value of a house which has entered the preforeclosure stage. BPOs are also used when lenders provide borrowers with home equity lines of credit (HELOC).
Mortgage lenders utilize Internal BPOs to obtain accurate estimates on the current value of the real estate. The BPO allows lenders to compare the actual value against the mortgage note balance to determine if solutions exist to help the borrower avoid foreclosure.
If you are facing foreclosure and seeking solutions to save your home and your credit, we invite you to visit our comprehensive real estate article library. We offer a variety of articles on obtaining broker price opinions, foreclosure prevention, tips for entering into a short sale arrangement, and personal money management tips.
Published on August 07, 2009 at 02:32 AM | Comments: 1