BPO vs Appraisal

BPO versus Appraisal

Predictive productStudies have shown BPOs are just as accurate as appraisals. BPOs are less expensive and take significantly less time to get. As far a accuracy, accuracy is in the eyes of the beholder. BPOs are forward looking – more predictive, appraisals are rearward looking – more historical. If you want an accurate prediction of future price, BPOs are the preferred choice. If you want a valuation based on historical data, appraisals are definitely the right choice. BPOs are best for looking forward, appraisals are best for looking backwards.

Agent with home buyersIt is important to understand, on a daily basis, brokers and agents work with home buyers – it is a vital part of their day to day job. They also deal with home sellers. They see both sides of the buyer/seller equation. Putting the science of a valuation aside,  the most critical component of ANY valuation is knowing what customers are willing to pay. C_REPS are agents and brokers who are formally trained and tested on accurate valuation procedures. A current BPO Certification is required to be a C_REPS. Appraisers deal more with home sellers, as inspectors, in order to sell a house AFTER a sale contract is written.

Click here Is a BPO Certification required to do BPOs?

Appraiser Calculating

Appraisers typically do an outstanding job of gathering all of the AFTER THE FACT data and turning it into clinical information – the appraisal. Brokers and agents establish the facts which are utilized by appraisers. Appraisers rely on the data which is essentially derived by agents and brokers.


Appraisals are bound by USPAP – laws and regulations which dictate how appraisals must be done. BPOs are not bound by any law. Due to the fact that appraisals a bound by USPAP, appraisals are not flexible. Even if the information provided in an appraisal is not needed nor requested, an appraiser must include the additional information in order to comply with the law. The appraisal customer ends up paying for more information which really isn’t needed.

FlexibleBPOs are completely flexible and can readily conform to customer specifications. It literally takes an act of congress to change the appraisal as a valuation product. You can take the best parts of the appraisal product and put it in a BPO.