In this fast-paced sellers' market this question has come up repeatedly. Many potential sellers are considering selling but not sure what their property is worth. Most sellers think they must have an appraisal to determine the value of their property. However, that is not the case. A broker's price opinion (BPO) is a cheaper and faster way to get an assessment on how much the property is worth.
Here's how it works. A BPO is generated by your real estate broker. He or she will carefully evaluate the exterior and/or interior of a home. Regardng land properties, the broker will evaluate any improvements made to the property. There are generally two types of BPO's used. The first, is an internal BPO which involves a broker spending time inside the property to evaluate the condition of the home. The second, is an external evaluation sometimes referred to as a drive-by BPO. Either of these two-evaluations are then compiled into a comprehensive analysis to determine the fair market value of the property.
A BPO is especially helpful in the early stages of a real estate transaction when setting the listing price of a home or property. A broker wll have the expertise and knowledge of the local current market trends in which they work, by using the comparables that have sold recently as well as what is currently listed on the market.. A real estate broker will also waive the cost of a BPO if the seller decides to list the home or property with them, and even if it jusf for the seller's own personal information the cost can be considerably a lot less than what an appraisal would be.
In the mortgage lending process, BPOs are not the go-to method in most cases. Although a buyer's lender is the one to order an appraisal at the buyer's expense, the seller is not privy to the value of the property only that it came in at value. Also, BPOs cannot be used for Home Equity type loans and on Refiance loans. Some State laws might also have further limitations on the usage of BPOs as an alternative to an appraisal.
The bottom line is that a BPO offers a convenient and less expensive way to estimate property values. Our team of real estate brokers are here to help, and with their expertise and knowledge can make sure you get the current market value of your property. Schedule a "Virtual Coffee," appointment!