What is a bpo?
A BPO stands for a " broker price opinion". You can think of it similar to a drive-by type appraisal. BPO's can be interior or exterior type. Most of them are performed by Realtor's that are hired by third party companies such as Land Safe or First American to perform the BPO. You have to specifically request INTERIOR or EXTERIOR type BPO's. The exterior type is almost like an appraisal. The difference is a Realtor is performing it. The third party company will request the Realtor fill-out several pieces of documentation including:
Comparable sales sold within last 6 - 12 months
A repair list and report based on the condition of the property
Description of property
Special requests if the property is vacant, occupied
Estimate to make the property sale in 90 days
A Purchase Contract if one is pending to the lender
County tax information according to location of the property
The BPO is purposed to provide the lender with an unbiased (third party) opinion of the value of the property. The cost to order a BPO is very inexpensive (under $100) in comparison to an appraisal $300-400). The lender will use the information provided to determine their value of the property. The lender will weigh this against the option of foreclosing on the property, accepting a deed in lieu, accepting a short sale or allowing repayment methods.