In the world of real estate, agents and corporate property owners heavily rely on the Broker Price Opinion—or BPO—to aid them in their decision making processes. The phrase ‘pulling comps’ simply refers to the act of gathering comparable active and sold listings.
Why Pulling Comps for a BPO is Important
Most of the time, real estate agents and mortgage companies utilize a BPO in order to bypass having a property appraised. A BPO has become even more common as the number of foreclosures and short sales has increased. Ordering an appraisal is an expensive option that can take considerable time to complete, property owners are commonly turngin to real estate agents for broker price opinios. The broker price opinion is a formidable tool, and is often the fastest and least expensive way to determine a property’s value before putting it up for sale. However, the broker price opinion requires agents to gather a list of comparable properties to aid in making this decision. This is why it is important for agents to pull comps for a BPO.
The Information Comps Provide
When an agent gathers comps for a BPO, they are essentially locating properties that are within a certain pre-determined location, of roughly the same size, and that sold within a six month time frame. This information is used in the broker price opinion along with some very specific information about the property in question. The BPO reviews all of the information provided and comes up with a very realistic number; property owners are able to utilize this estimated price when putting a new property on the market.
How to Pull Comps for a BPO
Pulling comps for a BPO can be a bit difficult for newer agents, but the experts find it one of the simplest tasks they are faced with on a daily basis. The best real estate agents and mortgage companies use highly specialized broker price opinion tools; some even utilize a specific team of agents that are able to process the provided information more realistically. In some cases, agents are able to find out whether or not a BPO was utilized at some point in the property’s past. Much of the needed information may already be present in this case; it is simply up to the agent to determine the new value based upon inflation and current property value increases.
How the BPO Uses the Information
The broker price opinion tool or company gathers information that eventually leads to determining an appropriate property value—much like an appraisal. The main difference is that a broker price opinion is cheaper and quicker to obtain. Each locality and BPO company has specific guidelines as to what information is needed. Rural property assessment requires a different sort of information than an urban property assessment, for example. The BPO assesses the current values of nearby properties that have been sold within the last few months, the square footage of those properties, and their selling price. Agents pull comps for the BPO in order to provide an average idea of the properties in the area.
Pulling comps for a BPO is simple if the agent has access to tools that are designed for this reason. There are a number of tools available online to help them pull comps for a BPO, although some require an annual membership.