What Is BPO in Real Estate?

What Is BPO in Real Estate?
By Bill Len

The literal definition of this is that a broker price option (BPO) is a real estate tool. This tool is used by lenders and banks that hold mortgages to determine the value of a specific property in the current market of the real estate industry. One of the primary uses for a BPO is during the refinancing process of a current mortgage. A BPO can also function as the process by a realtor to estimate the selling price of a property. Sometimes this method is chosen over an appraisal if time is an important factor; as an appraisal will typically take longer.

There is a special process that takes place when a BPO is used. First all of the needed information is gathered. This incorporates an analysis of the involved property, the prices of like properties, and local market information. The price that was arrived at is then entered into a short report. It ought to be noted that a BPO is radically different from an appraisal. The major difference is that the process is handled by a professional real estate person instead of a licensed appraiser. Additionally; the information provided in the resulting report is not as thorough as that of an appraisal. For the sake of security in using this method; we strongly urge you to consult a real estate attorney.

You might now be wondering exactly who hires someone to perform a BPO. As we mentioned earlier; this is most commonly done by a financial institution. The particular type of institution can be a mortgage lender or a bank. Sometimes a BPO company will outsource the job of completing the report to a realtor. Once in awhile a BPO can be hired without them requesting a fee for their services. This might be done in order to secure a sales listing for said property. This can be a viable option for somebody who doesn't have a wealth of money to pay for realtor services.

A few other reasons a financial institution can order a BPO include foreclosures, short sales, or home equity loans. There are a couple of security-oriented reasons as well. These include as a cross-check of a particular appraisal, a security check for a mortgage lender, or on a Real Estate Owned property. A BPO can be a significant resource for a party who has one of these reasons. One important side note here;performing BPOs can be a terrific source of additional income for realtors; as they are often in demand. Someone who can add this to their list of services will find it extremely beneficial.

For more information on broker price options (BPOs) we recommend doing a search on the Internet. You will find a plethora of relevant articles on this topic. If you prefer a more personal method of researching a topic; you can talk to your realtor or real estate attorney about it. Either one of these knowledgeable professionals will likely be glad to educate you further about BPOs.

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Thank you for reading.

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Please note the content is not intended to be, legal or investment advice. You should consult a licensed attorney or realtor for advice regarding your individual situation.

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