Broker Price Opinion
Broker Price Opinion (BPO) refers to an appraisal tool used by mortgage lenders and bank loss mitigation companies. Broker Price Opinion appraisals are conducted when lenders believe traditional property appraisals are unnecessary. It is important to note BPOs are not the same as an appraisal. Instead, they provide lenders with an estimated property value.
There are two types of Broker Price Opinion options – Drive by BPO and Internal BPO. Both types are utilized by lenders in order to obtain property value and estimated costs of necessary repairs to prepare the property for sale.
Drive by BPOs require a real estate broker to drive by the property and provide information about the property and area where it is located. The broker will submit a report to the lender which includes an estimate of square footage, room count, property type, approximate age, lot size, available parking, condition of the property and conformity to neighborhood and zoning laws. Most lenders also require photos of the property.
Internal Broker Price Opinion is more details and oftentimes requires hiring a broker to make contact with the homeowner or tenant residing in the property. There are two primary reasons to utilize an Internal BPO.
First, the Internal BPO is used when homeowners plan to refinance their mortgage note. Second, the Internal Broker Price Opinion is used to determine the value of property in the pre-foreclosure stage.
In the case of pre-foreclosure, lenders use Internal BPOs to obtain a reliable estimate on the current value of the property. This estimate is then compared to the mortgage balance in order to assist the lender in determining solutions to help the homeowner stop foreclosure.
Broker Price Opinion is also used by financial institutions when providing home equity lines of credit. BPOs must be conducted by a licensed real estate professional.
If you are facing foreclosure and interested in knowing what options are available, please take time to review our all-inclusive real estate and foreclosure article library. Here you will find information regarding short sales, preforeclosure, foreclosure, bankruptcy and more.