Licensed real estate brokers provide an opinion of value to homeowners for a variety of purposes. Examples include determining a listing price for selling a home, establishing the value of a home for an estate or other legal matters, and determining the current value of a home for insurance purposes.
Who can give an opinion of value?
A Broker Opinion of Value is typically requested by a property owner and completed for free. An appraisal could be requested by a lender or property owner and comes with a cost. In addition, an appraiser must follow strict guidelines when determining value versus a broker who is not required to adhere to the same code.
What is an opinion of value real estate?
An opinion of market value is an estimate of how much a property is worth in any given market. An opinion of value is reached by using one of three standard approaches: The Cost Approach estimates what it would cost to replace or reproduce the improvements as of the date of the appraisal.
Who can give a BPO?
The broker price option (BPO) is a tool that lenders and mortgage companies use to value properties in situations where they believe the expense and delay of an appraisal are not necessary. Real estate brokers are given an order to do a BPO by the lender, mortgage company, or loss mitigation company.
How much does a broker opinion of value cost?
BPOs are also less expensive than the cost of an appraisal. A BPO costs roughly $50 or so, according to Andrews, while an appraisal can run anywhere from $300 to $450 or more.
What is a Realtor letter of opinion?
A broker or salesperson may also provide a letter that briefly provides their Opinion of Value in written form. The opinion of value typically contains less background information than you would receive from a CMA. … A CMA or an opinion of value can all provide useful information to kick off the selling process.
What is a letter of opinion in real estate?
Opinion letters in real estate transactions – what are they and when do you need one? … This is essentially a formal letter from a firm of lawyers qualified in the law in the same jurisdiction as the foreign party stating whether the obligations in the legal documentation will be enforceable against the foreign party.
Are Broker Price Opinions legal?
Broker price opinions are not used or allowed in every state. … State laws may limit the use of broker price opinions to specific circumstances. Some of the factors that a broker will consider when developing a price opinion include the value of similar surrounding properties and sales trends in the neighborhood.
How much does a commercial BPO cost?
For instance, commercial appraisals typically begin at $2,000 (and can go up to $25,000 for very large properties) and can take several weeks. In contrast, BPOs can cost as little as $250 and rarely cost more than $2,000.
What does value opinion mean?
When you value something, you consider it important and worthwhile. For example, if you value someone’s opinion, you will ask that person’s advice before making a big decision. Value has to do with how much something is worth, either in terms of cash or importance.
Which is better BPO or appraisal?
Appraisals are typically more comprehensive than a broker price opinion. In addition, BPOs can be performed more quickly since they account for less data. These may be used by banks for deciding on a listing price when selling a home, finding an estate price or establishing the current value for an insurance policy.
Is a BPO better than an appraisal?
They’re usually the most helpful in determining what a property’s estimated value is before a sale. Since they’re just a quick estimate, BPO’s offer a high-level glimpse of a property and surrounding market. They don’t provide as much insight as an appraisal or different alternative valuation product would.
What’s a BPO in real estate?
When a real estate broker or other qualified professional determines a property’s estimated value, it’s considered a broker price opinion. A BPO is used as part of the listing agreement when selling a house. A lender, loss mitigation company or mortgage company that wants an assessment of a property can request a BPO.
How long does a broker price opinion take?
When I complete BPOs I can finish the report in about 20 to 30 minutes and that includes pulling comps and entering data.
How do Broker Price Opinions work?
Steps to start doing BPOs
- Join as a member of NABPOP – National Association of BPO Professionals. …
- Take the BPO Course.
- Pass the BPO Certification Test to become BPO Certified ASAP.
- Sign up with Banks, Lenders, Asset Managers, BPO Companies etc.
How accurate is a BPO?
Are BPOs Accurate. BPOs have been used for many years by the lending industry and mortgage servicers. BPOs have proven to be accurate and reliable. … An industry-wide study involving multiple valuation companies who perform both BPOs and appraisals was conducted in an effort to determine BPO accuracy.