Posted on | July 21, 2011 | Comments Off
You may have heard of real estate brokers and agents making money with BPO in real estate. This article will explain to you in a bit more depth what this all means.
BPO stands for Broker Price Opinion, which is a method banks often use to determine the value of properties they own or on which they have provided financing. The reasons a bank or lending institution would need this are many; for example, properties that are in distress or going into foreclosure produce situations in which the lender needs to know the property’s value. BPOs are used by banks and lenders when determining and approving loan modifications, refinances, and a variety of other circumstances.
Appraisal vs. BPO In Real Estate
A BPO in real estate, though similar in concept to an appraisal, is different in that a BPO can be completed by any licensed real estate agent or broker – hence the term “Broker Price Opinion.” The lender is requesting the opinion of a broker (or agent) rather than an appraiser, and will hire them to complete a BPO order on the property.
Depending on the type of information requested by the ordering lender, a BPO in real estate can vary in complexity. There are both interior and exterior BPO orders, with the exterior orders being the less complex. Generally, the more complex a BPO order, the more it will pay to the completing BPO agent.
Exterior orders typically involve the real estate agent or broker taking photos of the outside of the property and surrounding neighborhood and sometimes can even be completed without the agent even leaving the vehicle. A drive-by BPO in real estate is often used in the case of foreclosures because this provides the lender a quick overview of the property’s condition.
Interior BPO orders are more complex as they require the completing agent to enter and photograph the inside of the property, particularly any damage areas, and provide details on any renovations or repairs needed on the property. The lender may also request information such as square footage, room size(s), the condition of the ceiling, walls, flooring, plumbing, countertops, sinks, tubs, A/C and heating units, fencing,
roofing, siding, swimming pools, and hot tubs.
The agent completing the BPO in real estate also helps the lender in determining the property value by “running some numbers.” This typically involves calculating active and sold listing comparables based on the lot size, square footage, number of bathrooms and bedrooms, and property condition as well as surrounding neighborhood (number of foreclosures, homes for sale, etc.).
In summary, a professional BPO in real estate offers banks and lending institutions a more affordable way of determining the value of a property than hiring an appraiser. There is a great need for BPO orders as lenders use them when evaluating short sale offers, determining and approving refinances and loan modifications, and a variety of other situations. Any licensed real estate agent or broker can take advantage of this demand for BPO orders to add an additional stream of income to their real estate business.
Make Money With BPO In Real Estate
If you are interested in making money with BPO in real estate and to learn more, visit the BPO REO Academy, which offers not only comprehensive, easy-to-follow BPO training, but also a support community of BPO experts available to help you every step of the way.
This is a syndicated post. Read the original at What is a BPO in Real Estate?