The broker price opinion is a process used by a hired sales agent to determine the potential selling price or approximate value of a real estate property. BPO is popularly used in situations where financial institutions believe that cost and deferral assessment are not required.
Video Broker's price opinion
Parties involved
Broker price opinion initiated by financial institutions. Examples are banks, mortgage companies, and loss mitigation companies.
BPO is performed by a real estate professional acting on behalf of a financial institution. Such a professional may become a real estate agent, real estate broker, appraiser, or other qualified person. Through ODS, agents can improve their skills in property inspection, market evaluation, and property pricing. At a price of US $ 50-150 per BPO, the work can provide a side income or a regular income to a real estate agent. Agencies can also create working relationships and relationships with financial institutions. Some BPO agencies work through BPO companies that provide a single point of contact to clients and oversee their agents and reports.
Maps Broker's price opinion
Use of ODS
Financial institutions may order BPOs to:
- situations that do not support the cost or time of the full real estate assessment
- property owned real estate (REO)
- pending foreclosure or foreclosure
- short sale
- adding or cross-checking into ratings
- a home equity loan and a home equity line of credit of less than $ 250,000
- refinancing
- is interesting to cancel the mortgage insurance lender (LMI or PMI)
- due diligence by financial institutions
- evaluation of assets and bookkeeping by financial institutions
- the selling or buying price for an individual property or a home loan portfolio (sometimes for thousands of loans)
BPO process overview
A real estate agent or broker is hired to complete a BPO report on a property. An ODS may occasionally be requested at no cost in the hope that a financial institution, bank or lender will receive a sales list for the property.
BPO professionals then conduct an investigation. Many factors affect the price of a property:
- characteristics of individual properties, such as structure type, size, space usage, age, lot size, and parking
- how the property matches the immediate environment
- according to local zoning requirements
- environmental characteristics
- similar property values ​​in the surrounding area
- the amount of cleaning, repair, and preparation needed to create valuable properties
The result is a brief report, usually two or three pages in length. The report includes property and environmental analysis, photos, comparable properties ("comps"), and local and regional market information.
Type of BPO
A broker can do drive-by BPO or BPO interior. In drive-by BPOs, professionals do not have access to the interior of the property; they rely on exterior look, environmental information, comparison, and other documentation. The interior of BPO is more profound; it requires continued contact with property occupants, interior and exterior evaluations, measurements to verify dimensions of the room, and additional photographs.
Comparison with other value analysis types
- Auto-rating model
In the automated assessment model (AVM), the computerized mathematical model evaluates the basic features of the property, compares with the sale of the area, and determines the coarse value. Calculations take into account information about the size of the property, the bedroom, and the bathroom. AVM is a basic evaluation - "just to ensure that property values ​​are in the right ball park" - and can be replaced with a full real estate assessment. Because AVM does not involve site visits, it does not include factors such as conditions or upgrades.
- Comparative market analysis
A person who wants to sell or buy a home may ask the agent to conduct a comparative market analysis (CMA) to determine the fair listing price or the offer price. The process of deciding the price of a CMA is similar to a BPO. However, BPO - whether the exterior drive-by BPO or BPO interior is full - is more thorough than most CMA.
- Real estate appraisal
Unlike BPO professionals, real estate appraisers must have licenses or certifications in most countries. ODS is less thorough than assessment.
Only licensed or certified Appraisers may conduct appraisal or assessment.
See also
- BPO Standard and Guidelines
References
Source of the article : Wikipedia
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