Seasaw - Thank you for the time you spent doingthis. If members feel additional information should be added or subtracted from this post, pm me. ~ Pine
What is a Broker Price Opinion?
Broker Price Opinions (BPOs) are property valuations conducted by licensed Real Estate Agents, Real Estate Brokers, or Real Estate Appraisers in areas where they know the real estate market?
What does a BPO consist of?
Agents provide property valuations by making a physical inspection of a property. The inspection may be an exterior inspection, also known as a drive by, or an interior inspection.
During an exterior inspection, you will typically be asked to take pictures (e.g., street scene, front of subject, house number, side view, amenities, neighboring properties, etc.) of the property, including damages and arrive at a value based on review of 3 recently sold comparables and 3 currently listed comparables. You will be asked to provide summary information (e.g., age, style, gross living area, condition, location, lot size, room count, car storage, view, upgrades, etc.) of the subject and comparable properties. Interior BPO requires the same type of analysis. However, you will be asked to take pictures of interior and exterior of the subject property as well as note damages and general condition.
Why are BPOs Ordered?
A BPO is ordered for many reasons. It can be in support of Private Mortgage Insurance deletion, Default, Pre-Foreclosure, Foreclosure, Loan Refinancing, Home Equity Lines of Credit, Portfolio Acquisitions
What issues will commonly generate quality control questions of reviewers?
-Comps Older Than Six Months (in an appreciating market)
-Comps Greater than 1 mile of subject in suburban areas(with no explanation)
-Comps That Exceed 10%+/- of subject's living area
-Style of Comps different than subject
-Bedroom and bathroom count of comps used is different than subject
-Estimate value is greater than the subject's current list price
-Spread between your as is value and repaired value is less than the amount of your estimated repairs.
-Spread between your as is value and repaired value is more than three times the amount of your estimated repairs
-Rate subject as poor, damaged, or low without providing repair information.
-Comps used that aren't of similar condition as subject.
-Rate subject as good or excellent and note that repairs are needed.
-Use of REO comps
-30 Day Quick Sale Price exceeds Suggested As Is List Price Value
What are general guidelines for assigning condition to the property?
POOR: Home is boarded up or has broken and missing windows, obvious signs of exterior neglect, peeling or missing siding, older damaged roof, vacant and generally uninhabitable.
DAMAGED: Falls within poor area and affects the structure specifically but signifies a condition worse than just neglect (e.g., fire, flood, wind, hurricane, tornado, earthquake, etc.)
FAIR: Curable physical deterioration. Beginning stages of neglect, such as older windows and older roof, yet functional. Exterior may need to be painted, but primarily intact.
AVERAGE: No apparent recent updates, such as roof, windows or siding, but no signs of any significant neglect either. The exterior features and property appear generally maintained.
GOOD: There are recent improvements observed, such as newer siding, windows, or roof; or it appears to have been recently painted, very well maintained, and/or is a younger home, thus features are newer, yet have no obvious signs of neglect.
EXCELLENT: All major features appear to be recently replaced, and appear this way as well. Or the home is newer (less than 5 years old) and well maintained. Visually shows as having been remodeled in a workmanship like manner.
How much can I earn doing BPOs?
Fees vary. Fees offered for Interior BPOs are typically more than exterior BPOs.
How much should I charge for performing BPOs?
The individual agent has to make the determine how much their time is worth.
Where can I find a list of BPO companies?
You can find a list of BPO companies by searching this forum, using any of the popular Internet search engines, of purchasing a list off eBay.
KT is to be thanked as well for adding:
~Find out if BPOs are legal in your state. Some states require not just an agent's license, but also a broker's license. Some do not allow any licensee to be paid for completion, (unless it could result in a listing) and in some, they are just plain illegal. Check your state's licensing website, or legal hotline to verify.
~Find out how to get paid for BPOs. Does your state or office policy require payment to go thru your broker? Can you (legally) get paid directly? Again, can usually be verified via a phone call, or state website. If payment must go thru the broker, you'll need their Tax ID number for W9s.
~Does your broker's E&O policy cover BPOs? If not, you may have to purchase a seperate policy. Also, make sure your broker can give you a copy of the declaration page.
~Make sure you have your broker's OK to complete BPOs. Some don't allow it. Some have agents dedicated to completing them already. If your broker says no, then it's no.
~Find out if your broker expects a cut of your BPO checks.