What is a broker price opinion?
When a bank or asset manager gets a new foreclosure listing to sell, they immediately need to know the value of the home. Typically, a bank will assign one to three agents to assess the approximate sale value of a home. These banks expect each agent to submit three comparable sold listings and three comparable active listings, as well as an estimate of what the agent believes the home will sell for.
A broker price opinion is not as detailed as an appraisal and does not involve as much work. BPOs differ from appraisals in several ways:
- Appraisals typically cost more than $300. Most BPOs pay brokers between $50 and $100.
- Appraisals require detailed measurements in square feet. BPOs are based on recorded measurements from county assessors.
- Appraisals use a recognized standard format used by lenders and mortgage professionals for accurate property valuations. The BPO’s are prepared in different formats and are simply used as decision-making tools for the asset managers of each bank.
- Appraisals are typically 15-20 pages long with detailed information on every aspect of a property. BPOs usually have 2 pages with information related only to the final sale price.
Why do banks need broker price opinions?
Asset managers and bank staff make decisions about various properties every day. Reading a lengthy 20-page review and filtering out critical information is a waste of time. These asset managers need concise financial documents that make their choices easy. This is why BPOs are so critical to their work. Additionally, a BPO saves the bank over $200 per property compared to a standard appraisal. That money adds up quickly and saves the bank thousands and thousands of dollars a year.
Another reason why banks prefer BPOs is that the response time is much faster than appraisals. BPOs can usually be done by agents in less than 48 hours. Many appraisers visit the property within 48 hours, but then require another day or two to process the information and create the full report.
HHow Agents Can Become BPO Agents
Once a real estate agent understands what a broker price opinion is, they immediately want to learn how to become a BPO agent and start processing BPO for banks. This is understandable as a good agent can earn an extra $500-$1,000 a month just by signing up with banks and applying for BPO assignments.
The steps to become a BPO agent are quite simple. The basic process takes about a week. Here is a summary of the basic steps:
- Get a list of BPO banking departments. Make sure your list has more than 100 banks and asset managers.
- Register on each of these banks’ websites as a BPO agent. This process can take over 15 hours to sign up for all 100 websites, so schedule your time wisely.
- Follow up with banks and asset managers to make it clear that you want to process BPO for banks and become one of their preferred agents.
- Once you get your first assignment, do a fantastic job and do everything you can to make sure your client is happy. It only takes a couple of solid banking clients to keep you busy with a steady stream of Broker Price Opinion assignments.
As you begin your quest to become a BPO agent, it is important that you never give up. Once you start processing BPO for banks, your business will grow rapidly. Good luck!
