What is a Broker Price Opinion?
A Broker’s Price Opinion (BPO) in real estate terms refers to a report drawn by a licensed real estate broker or agent based on the value assessment of a property. A BPO is similar to an Appraisal but less detailed and thorough.
A Broker’s Price Opinion can be performed either through an Exterior Drive-By or an Interior Analysis. An Exterior Drive-By would involve a quick look at the neighborhood and the outward qualities and facilities of the property – this practice is very common amongst real estate agents working for banks planning a short sale or foreclosure. The BPO given by the agent would usually be a guideline for the price the bank would be selling. On the other hand, the Interior Analysis would consider all the inner facilities, structure, and state of the property before a value will be given. Furthermore, it is often the practice for the broker or agent to find 3 similar properties recently sold in the neighborhood and used the prices to guide his or her value assessment.
The Broker’s Price Opinion is less expensive and time-saving than a full appraisal. Generally, banks and other institutions use them as a mere guide for assessing the value of a property.