Broker
Price Opinions or also known as BPO is a process of taking opinion of brokers
on any property. There are individuals as well as organizations working to
estimate value of any property. It is not necessary that the person giving the
opinion must be a broker, any person who has knowledge of real estate
and value of a
property in a certain area can give opinion on price and value of the property.
According
to Dean Graziosi, the value of property is estimated according to different
factors of a particular area. These factors include value of surrounding
property, sales trend, estimate of the costs associated with the property, costs
of the repair of any damages caused to the property etc. It is also important
to note that the BPO is not similar to appraisal, it is entirely different
phenomenon.
According
to Dean, BPO is a great source to find out value and pricing of a property. Dean
Graziosi is a real
estate business owner.
He is a successful entrepreneur with a big portfolio and over two decades of
experience. Dean started from scratch and established his own multi million
dollars business within a time frame of less than two decades. Dean is also a
bestselling author. He conducts forums and writes blog on regular business.
He is
one of the most popular personalities of real estate. Let us have an overview
on BPO in the light of Dean’s teachings.
What is a BPO?
While
the contents of the opinion might vary, a BPO usually contains similar
information based on value of a property.
·
A
BPO usually contains information on a single subject.
·
It
also contains knowledge on local market, listings and sales comparables.
·
A
real estate agent is given an order by lender, Mortgage Company or a less
mitigation company to do BPO on a given property.
·
It
is also associated with foreclosures and short sales.
·
BPOs
cost less than a full appraisal.
When BPO is used:
There
are various reasons why BPO is carried out; a few of them are given below.
·
Mostly
BPO is used to avoid appraisal. Appraisal is costly as compare to BPO.
·
It
is often ordered due to pending foreclosures and delinquent payments.
·
It
is one of the best options used in case of refinance situation.
·
In
case of foreclosure, the lender will ask for BPO in order to get a reliable
estimate of current value of the property. This value is then compared to
mortgage balance. Following all this process recommendations are suggested.
What is involved in BPO?
Some
people who are not aware of the overall process of BPO assume that the process
is quite simple and involves a few photographs and trip by the land. In reality,
smallest of the BPO form contains all of the following features. (Remember: the
form is either sent by an individual or by a company, similarly the BPO is
either generated by an individual or a company.) Large and complex forms have more
complex and detailed options.
·
Broker
information
·
Location
and neighborhood
·
Conformity
to neighborhood
·
Property
type, age and styling
·
Condition
of exterior
·
Parking
·
Lot
size
·
Estimated
square feet
·
Estimated
root feet
·
Comments
·
Three
recently sold comparables
·
Three
comparable recent properties
·
Two
photos
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