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When is a BPO or Broker Price Opinion Used?
Who Might Call You for a BPO
and Why
The BPO, or Broker Price Opinion, is a
tool used by lenders and mortgage companies to value properties in
situations where they believe the expense and delay of an appraisal is not
necessary. Real estate brokers are given an order to do a BPO by the
lender, mortgage company or loss mitigation company. The broker does
either a Drive By BPO or an Internal BPO in most cases.
A BPO, or
Broker Price Opinion, is a tool used by mortgage lenders, banks and others
to value a property in the current market. The reasons and timing for
using a real estate broker for a BPO might include:
The cost of an appraisal is to be avoided.
Delinquent payments and pending foreclosure.
In a refinance situation.
When refinancing for lower
rates or other reasons is a booming market, lenders are doing a great many
of these loans. In many cases, the home has a recent mortgage where a full
appraisal was performed. To lower costs, the lender may decide to hire a
real estate broker to do a BPO, or broker price opinion.
In cases where a lender is considering foreclosure,
or even if they are working with the borrower to come up with help with
their situation, the lender will order a BPO. This allows them to get a
reliable estimate of the current value of the property, compare it to the
mortgage balance, and recommend
solutions.
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