BPO Forms Logo

Supplemental Income with Brokers Price Opinions

To the unfamiliar ear, a broker’s price opinion, or BPO, may sound like a complicated figure reached through numerous steps done by a real estate broker. The truth is that a BPO is actually reached through a very simple process, and many real estate brokers use Broker Price Opinion’s to supplement their incomes.

What is a BPO?

A BPO (Broker Price Opinion) is a very rough estimate of what a broker thinks a house might be worth. They’re often used by the bank when a home has been foreclosed or in other situations when the bank wants to know about how much the home is worth without getting a full appraisal. In most cases, a full appraisal has been done on the particular home at some point within the last several years anyway, so the bank has a rough idea of what the home is worth, but wants a broker’s opinion, typically after a family moves out or some other change has been made.

BPO’s are often a cheaper alternative than appraisals for banks. As a real estate agent you should take advantage of this fact!

How a Real Estate Broker Completes a BPO

While the name might sound complicated, the truth is not. When a real estate broker complets a BPO of a particular house, most of the time they simply drive by. This type of report is often referred to as a drive by BPO. They look at the house from the outside and make a determination based on that as to what the house might be worth. In some cases, the broker may get out of his or her car and actually assess the house a little more closely, but in most cases, they simply take a quick look.

The broker will look at things like the value of the properties around the home, the trends in sales occurring in the neighborhood, as well as any estimated costs of repairing the home or getting the home ready for sale. While a BPO sounds a lot like an appraisal, it is very different and much less in-depth than an appraisal, it is more comparable to a CMA.

Requirements

In order to perform BPOs, banks are looking for qualified real estate professionals with local market knowledge. Most of the time, a bank has a list of homes that require a BPO, and the brokers work on a “first come, first serve” basis. Essentially, the first realtor to accept the BPO order will be paid for the order as long as it is completed on time and to the clients quality control standards.  It’s a great way to supplement income, especially for brokers who aren’t selling homes as often as they would like.  In addition if you are interested in pursuing a career in REO’s, most clients will require experience working with BPO’s.

How Much Can a Real Estate Agent Make with BPOs?

With a long list of BPOs, a real estate agent could make anywhere from $3,000 to $7,000 extra a month doing BPOs. Depending upon the amount of work the real estate agent can handle, the numbers can vary a lot, but this is a good source of additional income for any real estate agent.

BPO Quality and Condition Guidelines

Below is a copy of a useful guideline to have consistent guidelines when noting or adjusting for BPO Quality or Condition. While many agents still predominantly use Good, Average, Excellent, as the descriptors, its becoming difficult to interpret. One agents opinion of Fair maybe another agents Good. The guidelines below are to give you a potential break down of some standards that are circulating to be used when completing Broker Price Opinions. At the end of the day though, A Broker Price Opinion is just that. An opinion. Good Luck.

BPO Condition Ratings Instructions

How to Pull Comps for a BPO

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.

Commercial BPO Form Available

Finally a Commercial BPO Form!

Commercial BPO FormWe know that is what many of our users are saying. The commercial BPO form is one of our most frequently requested forms and you no longer have to look elsewhere.  The commercial BPO form is available from within all paying subscriptions to BPOForms.com.  If you are currently a member you will see the commercial BPO form in your available forms list.

The form provided offers the ability to perform generalized Commercial BPOs for multifamily, Retail, or Office properties.  Looking for a vacant land bpo form.  While there are a lot of factors to be considered when generating a Commercial BPO, our Commercial BPO form is a general version that allows you the freedom to present your facts regardless of how much information you actually have.

If you are interested in signing up, please check out the demo version of the form.  We have also embedded the form below:

If you have any questions or concerns, please do not hesitate to contact us via our contact page.  Our BPO Forms Software allows you to easily fill out the information you have for your specific subject property.  Our layout provides a simple format to enter the information as you collect it.  Save your work and return at your leisure.  At any time in the process you can click on the icon of the printer to preview what the filled in BPO form looks like.  Once you are comfortable with the BPO you can email the Commercial BPO form from the system or save it as a pdf to your computer and print or email later.  Generate unlimited BPO’s and choose from over 20 different BPO forms to provide a client, financial institution or other interested party.  Thousands of BPOs have been generated with our software and its easy to see why.  Learn more about our features and get started generating your Commercial BPO Form Today.  Click Here to Learn More.

Thank you,

BPO Forms

How to do a BPO – Broker Price Opinion

This is our Short Guide to How to Do a BPO but if you are looking for a more comprehensive book of How To Complete a BPO you may want to Click Here to See our Book

 

How To Do A BPOWondering where to start and exactly how to do a BPO? When a lender, such as a bank or mortgage company, determines that a full appraisal of a property isn’t worth the time or money, a real estate broker will be ordered to perform a broker price opinion. A broker price opinion, often referred to as a BPO, is a method of appraisal in which a broker performs a visual inspection of a property to determine its estimated appraisal value. There are two types of broker price opinions; drive-by and internal.

Step 1 How to Do a BPO: Deciding the right BPO Form

Obtain the appropriate BPO forms from the lender or mortgage company. The same forms are used for drive-by and internal methods. Broker price opinion forms must be completed for legal purposes. A BPO will not legally be recognized without completed forms. Check here to see if we offer the BPO Forms you need. As each step is taken, record the information in the appropriate box.

Step 2 How to Do a BPO: Determine the Age and Style of the Property

Each piece of property is unique and falls into a category, which is used within the real estate industry. For instance, a single-floor home with no attic should be labeled as a “ranch” style property. No matter the type of property, record the number rooms on the BPO forms. Estimate the total number of rooms for a drive-by broker price opinion. Record the estimated age of the property as well.

Step 3 How to Do a BPO: Take Photographs of the Property

A minimum of two photographs must be taken of the outside of the property for a drive-by broker price opinion. Additional photographs may be taken but are not legally required. For an internal broker price opinion, take photographs of the exterior of the property as well as photos of each individual room. Photograph any damaged areas of the interior of the property. For both types of BPOs, write notes in regards to the visual appearance, including damage and cleanliness, on the forms. For an internal BPO only, record notes on the condition of each room. List any damages, the current amount of normal wear on items such as wood and carpet and describe any architectural flaws.

Step 4 How to Do a BPO: Take Measurements

Record the measurements of each room and write down the total amount of square footage for the entire property. If the property has a garage, driveway or parking lot, take measurements of these as well and record the square footage separately. Estimate the measurements for a drive-by broker price opinion.

Step 5 How to Do a BPO: Take Notes on Repairs Required and Maintenance of the Property

For internal broker price opinions only, take notes of the the necessary repairs to the property such as repairs to structural damage like broken roof tiles or damaged windows, the replacement of dirty carpet, damaged window screens or torn wallpaper. Take note of items that need to be resolved, such as removing any snow from the property and maintaining the lawn. Also if there is any trash or unneeded items that should be removed the property.

Step 6 How to Do a BPO: Compare the Property to Similar Properties

Since a BPO is the opinion of a real estate broker agent, a comparison between the property in question and those which are similar is required. Review the current market for at least 3 properties that are of the same size, age and style. Additionally, review properties on the same street and in the same neighborhood. Compare the properties and determine a fair market value for the home which is being inspected.

Step 7 How to Do a BPO: Complete the BPO Form

Record all of the necessary information on the BPO forms and sign the bottom of the documents, if required. Return the documents to the lender or mortgage company and submit the photographs of the property. Once the documents are filed, the lender or mortgage company will complete the process of authorizing the broker price opinion.

Although it is cheaper for lenders and mortgage companies to have a real estate broker perform a broker price opinion, the BPO is nearly as thorough as an actual appraisal. When completing a broker price opinion, follow the steps carefully or the inspection might not be considered valid.