Sacramento Expert Short Sale Real Estate Agent

Archive for the ‘BPO’ Category

BPO is an acronym for Broker’s Price Opinion.  In general, the term Broker’s Price Opinion (BPO) is a method that a Real Estate Broker (or an agent acting on behalf of their employing broker) uses to estimate the probable selling price of a Real Estate property/house.  This estimate is submitted in a report to the BPO Company that has ordered it. This basically is information of  properties that compare to the (subject) house that is being priced.  This is similar to a CMA that an agent would provide a seller to show the approximate value of their property.

These are done for numerous reasons, but I would like to tell you how they would play into a role of doing a Short Sale.  When taking a listing of a Short Sale there are many factors that play a role in the process of getting the bank to accept a short sale at all.  With that said you have listed the property for sale, received the whole hardship package from the seller, and submitted this package including an offer to purchase to the lender for approval.

The lien holder (bank) will then look over the package to make sure everything is complete, and then they will secure an agent or broker, an place an order to obtain a BPO on the property.  Basically the bank just wants to see the market value of the property and the condition the property is in.  This gives them some kind of idea if the offer submitted is really a good one compared to the BPO, and how much their bottom line will be.

Example:

• Home loan owed on a home is $700,000
• Listed the home as a Short Sale for $600,00
• Offer submitted to the bank of $600,000
• Bank orders a BPO to be done
• BPO comes in at an approximate value of  $640,000

 The bank now has a higher value than the offer, and this gives them great information on how to proceed with the offer.  They have a choice of doing a few things at this point

• They can accept the offer presented to them
• They can counter the offer
• They can reject the offer
• They can refuse to allow a Short Sale

Having done BPO’s  myself I now have a better understanding of a banks position.  If you have any questions about buying, selling real estate in Sacramento, please feel free to contact me anytime.

Terri Wisecarver 

REALTOR

Sacramento Real Estate