What is a BPO Agent?
A BPO agent is a licensed real estate agent or broker who has been hired by a bank to provide an opinion of what a property could sell for on the open market, taking into account neighborhood sales and the condition of the property. A BPO agent will produce a BPO report (Broker’s Price Opinion), which is very similar to a comparative market analysis, which is what realtors do when working with homeowners to recommend a sales price for their home.
Mortgage companies hire BPO agents to provide a BPO report because it is much cheaper than an appraisal. A BPO can cost around $50, whereas an appraisal will typically cost $350.
Banks order a BPO as one of the first steps in a short sale process, so they can get an idea of what the current market value is for a property. Banks use the BPO as a tool to help them negotiate with the buyer for the highest price possible to minimize their loss on the loan balance.
When preparing a BPO, a BPO agent will drive by the property, take photos, and document the selling condition of the property. The agent will then input their numbers, making some adjustments, to produce an auto-generated report, which will then be sent to the bank. Similar to a realtor’s comparative market analysis, these reports are anywhere from 1 to 20 pages in length and show recent sales comps and public records for properties in the neighborhood.
BPO agents don’t make much money from doing BPO’s, but they do these with the prospect of potentially getting the listing after the bank takes the property back as an REO (Real estate owned) after the foreclosure sale.
If you have any further questions about BPO, please contact us.