Why Are Broker Price Opinions Requested?

Traditionally, property valuations have been conducted by appraisers. If so, why are broker price opinions requested? Because each of them has a various reason. While appraisals are used mostly in real estate buys, broker price opinions (or BPO's) are used in short sales and property foreclosures.

When a loan is in default, the loan provider needs an impression of value in order to dispose of the property. This can be done possibly in pre-foreclosure stages as in limited sales, or in post-foreclosure stages as in REO's.

When a loan is in default, the loan provider needs an impression of value in order to dispose of the property. This can be done possibly in pre-foreclosure stages as in limited sales, or in post-foreclosure stages as in REO's.

The broker price opinions have certain benefits compared to an appraisal, which make it a really useful resource in today's market. The most essential benefits are cost. A BPO is much more affordable than an appraisal. The loan providers pay on average among $40 to $120 for a non - commercial BPO, while an evaluation is somewhere between $300 and $600.Other benefits is the simplicity of the job, which allows for a shorter turnaround time. The broker price opinions are mostly drive-by, and the review is two pages long. The valuations are mostly interior, and the report is at least twenty pages. Most BPO's are due in 48 hours, which includes the trip to the residence. In excessive situations, the turnaround time can be very limited, down to a few times.

The Broker Price Opinion takes into account fewer factors, therefore less training and requirements are needed. However, this makes BPO's less purpose, more opinionated. The assessment is very complex, with many factors and adjustments, and more specific. It is still a viewpoint, but you can easily task a BPO with an appraisal.

Because of these advantages, the broker price opinion is the main valuation tool used by lenders in default situations. As foreclosures continue to go up, so the number of BPO's needed. When I started thinking that I want to perform broker price opinions, I was not sure how easy it was to tap into this market.

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