Why A Broker Price Opinion is Important To Banks
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When banks are forced to take back homes that are in foreclosure, they will need to resell them again. In order to do that, they have to know the current estimated value of the home. Real estate agents are sent out to do the work. The brokers will also need to provide listings of homes that are comparable to the foreclosed home. They should also be homes that have already sold.

This method is called a broker price opinion, or BPO. Broker price opinions are different than appraisals in the following ways:

• A Broker price opinion usually gets measurements for homes from other sources and those sources could use estimated information. Appraisals deal with measurements that are exact.

• BPOs usually pay between $50 and $150 and sometimes more, depending on the amount of work the broker is required to do. Having an appraisal done can cost about $350 or more.

• A Broker price opinion is short and consist of two to three pages. Appraisals are more detailed and can be up to 20 pages or more.

Having BPOs are critical as to how banks can decide on what price to sell the property. There are some decisions that they need to make within a short period of time, and they have to rely on BPOs to make their decisions. Plus, the bank saves money because an appraisal costs more than a BPO. The bank ends up saving a lot of money every year by using them.

Using broker price opinions are also better for banks because the real estate agents can get them back quicker than the bank would be able to get an appraisal back into their hands. It could take a week before the bank would get anything from an appraiser regarding the foreclosed property in question.

If a real estate agent is interested in conducting BPOs, they should inquire with the bank or lender to see if they have any openings. This is a side gig that the brokers can do in their spare time. They will be able to make additional income while working getting income for their full time job.

They can look at REO properties and see what they need to do to start conducting BPO. Not all of them will be the same. At some properties up for foreclosure, the homeowner or tenant is still living there. In this scenario, it becomes a test of how you will handle the situation.

However, it’s better to handle it in a professional, but compassionate way. They’re already feeling the sting of losing their house; they don’t need to be pounded over the head with it. So, when brokers conduct these BPOs, they should do it with dignity and class.

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