BPO’s are the estimated value of a property, as determined by a real estate broker or a qualified individual or firm. A broker price opinion is based on the characteristics of the property, which include differences in comparables’ location and/or transaction type.
BUT WHO WANTS TO ADMIT THEY AREN’T QUALIFIED?!
Investopedia explains Broker Price Opinion. Some of the factors that a broker will consider when pricing a property include: the value of similar surrounding properties, sales trends in the neighborhood, an estimate of any of the costs associated with getting the property ready for sale and/or the cost of any needed repairs. It is important to note that a BPO is not the same as an appraisal.
“Just as out of area appraisers are killing many deals,
so are inexperienced and under-qualified agents
churning out fraudulent BPOs”
JD, Tampa Bay Appraiser
Here is an example: Recently, I received an offer on a short sale for $220,000 with a list price of $245,000. Keep in mind this is short sale with my best comparable sale with NO distress sold recently for $245,000 down the street (same builder). The subject is a spec home built in an area of homes built in the 50’s and 60’s or older. The agent came to do an interior BPO. I showed him my comps, which determined our listing price as well as the buyer’s offer. He said thanks and left after he told me he had thirty more to do in the next three days. As soon as heard those words, I knew he would not give ANY one of those BPO’s the proper analysis.
“There’s no government oversight of BPO’s so Larry the cable guy can do them as long as he has access to MLS. That’s scary.”
Dave Tipton, Broker- Florida’s Beautiful Homes Continue reading →
The year 2010 will soon be history. The happenings in the real estate market will not likely be forgotten anytime soon however. This past year was full of tax credits, historically low interest rates, and some controversy sprinkled on top. Here is an overview of the housing market headlines for 2010.
