What is a BPO


BPO is an acronym for Broker’s Price Opinion.  In general, the term Broker’s Price Opinion (BPO) is a valuation which a Real Estate Broker (or an Agent acting on behalf of their employing broker) uses to estimate the probable selling price of a residential Real Estate property/house.

The estimate of price is submitted to customers in a BPO report (2-3 pages) which includes pictures of the property and neighborhood, local and regional Real Estate market information, neighborhood analysis, and sales analysis of comparable properties.  A BPO is more detailed and more accurate than a CMA (Comparative Market Analysis) and just as accurate but less detailed than a residential Appraisal.

A BPO uses the relevant techniques of an appraisal and combines it with the market knowledge of Real Estate Agents and Brokers.

There is no law which requires a BPO certification, but any customer who does not demand a BPO certification is taking a big risk with the efficacy of the BPO.  Certified Real Estate Pricing Specialists C-REPS are trained in proper BPO techniques and procedures. C-REPS must pass a stringent BPO Certification test in order to become BPO certified and achieve the C-REPS designation.

A BPO is not a new valuation product. The mortgage default and mortgage service industry created the BPO, approximately 30 years ago, in order to make financial decisions without having to order expensive appraisals. The above organizations required thousands of valuations at a time and BPOs became the valuation method of choice for these organizations. BPOs continue to emerge as the valuation choice of many banks, lenders, financial institutions et al due to the accuracy of BPOs (more accurate than a CMA), the faster turn around time (3 days BPO vs 2 weeks appraisal), and the lower cost (BPO 50-75% less cost than appraisal).

Performing a BPO, in the BPO industry, means a Real Estate Professional (agent, broker, or appraiser acting in an agent/broker capacity) is requested by a financial institution to submit an estimate of a selling price for a property in a BPO report for a fee. Agents and brokers across the country make a lucrative income performing BPOs.

Agents and Brokers will also provide a free BPO as a value-added alternative to providing a Comparative Market Analysis CMA in order to get a listing from a homeowner. Agents and Brokers can use BPOs as a marketing tool.