Broker price opinion refers to a type of property appraisal used by mortgage lenders to determine property values. Banks commonly use BPO appraisals when assessing the current market value of properties entering into foreclosure or real estate short sales. Broker price opinions are sometimes used in lieu of traditional property appraisals when borrowers enter into loan modifications or mortgage refinance.

Broker price opinion real estate appraisals encompass specific criteria to determine property value. These include: property location, property condition, lot size, square footage, and market values of similar properties existing in the area. The overall value of real estate declines when multiple foreclosure or bank owned properties exist.

Mortgage lenders utilize BPO reports to acquire information pertaining to the neighborhood where the appraised property is located. Lenders need to know how many homes are listed for sale; number of houses sold within the previous 6 months; information about homeowner’s association, if one exists; and the number of foreclosure properties in the area.

Lenders can use either drive-by BPOs or internal BPOs to obtain required information. Both types of broker price opinions provide lenders with current market value and repair cost estimates. Mortgage providers rely on BPO appraisals to determine if the real estate qualifies for the intended transaction.

Real estate brokers conduct broker price opinion home appraisals. Drive-by BPO literally means brokers drive-by the property to gather required information. When brokers use drive-by BPOs they estimate the home’s lot size, square footage, number of rooms, exterior condition of the home and available parking.

When brokers conduct internal BPOs they must enter the house to obtain information about the property. Internal broker price opinion reports are more detailed than drive-by BPOs. Brokers must conduct a thorough property inspection to determine the home’s interior and exterior condition. Brokers inspect all aspects of the home including: flooring, ceilings, fireplace, appliances, electrical, plumbing, HVAC, siding, roofing, gutters, fencing, swimming pool, hot tub, etc.

Internal broker price opinion reports are usually required when mortgagors require loan modification or mortgage refinancing. Banks require accurate reporting to determine the current market value of properties in order to prevent over-financing.

Mortgage lenders typically require internal BPOs when mortgagors enter into real estate short sales. This option is sometimes offered to borrowers facing foreclosure. When lenders enter into short sale contracts they allow mortgagors to sell the property for less than the amount owed on the mortgage loan.

Banks establish a short sale price based on information provided in the broker price opinion report. Once the short sale price is determined, borrowers list their home for sale through a real estate agent. In most cases, banks require the property to be sold within 3 or 4 months. If the short sale is not completed in the appropriate timeframe, banks commence with foreclosure action.

Broker price opinion property appraisals are usually required when borrowers apply for home equity loans or home equity line of credit (HELOC). When borrowers obtain HELOC financing they are given a line of credit which can be assessed on an as-needed basis. Home equity loans involve taking out a second mortgage. Mortgagors typically take out home equity and HELOC loans to make home improvements, pay college tuition, or pay off outstanding debts.

Author Bio: Learn more about broker price opinion appraisals, mortgage financing options, and foreclosure prevention strategies from real estate investor, Simon Volkov. His website provides a comprehensive home buying article library available at www.SimonVolkov.com.

Category: Real Estate
Keywords: broker price opinion,bpo,home equity loan,mortgage refinance, loan modification, short sale