The New Agent's Guide to the Broker Price Opinion (BPO)

Dated: August 15 2020

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The broker price option (BPO) is a tool that lenders and mortgage companies use to value properties in situations where they believe the expense and delay of an appraisal are not necessary. Real estate brokers are given an order to do a BPO by the lender, mortgage company, or loss mitigation company. The broker does either a drive-by BPO or an internal BPO in most cases.

In some states, BPOs have been a problem, as real estate brokers aren't allowed to charge for services, especially when they step on the toes of appraisers. However, that's slowly changing, as the appraisers don't want to do BPOs anyway, as the work doesn't pay enough. Some real estate agents who are barely hanging on, though, are happy to make $75 to $150 or so to go out and fill out the lenders' form for valuation of a property. Learn about doing BPOs here, when they are used, and the types and requirements of each.

When Is a Broker Price Opinion Used?

Discussing Plans with Real Estate Agent
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Lenders and mortgage companies might use a BPO for many reasons. Learn the primary reasons for their use here. It isn't just for foreclosures. They may want to look at a refinance or mortgage forbearance agreement.

The Two Major Types of BPOs

Foreclosure sign, real estate
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By far, two major types of BPO are used by national lenders and loss mitigation companies. Learn the types, requirements for each, and what you might get paid.

Often the type of BPO ordered by the lender is based on whether the property is occupied or not.  If it is, they may not want to alarm the borrower or create an antagonistic situation with the real estate person. Sometimes the agent will arrive to do a drive-by BPO only to find the property abandoned. They would then call the company ordering the BPO to see if they want to convert it.

What Happens During a Drive-By BPO?

A drive-by BPO is a common tool for lenders in foreclosure and refinance situations. Learn what you might be called upon to do and report when doing a drive-by BPO.

This doesn't mean stay in the car necessarily. Getting out and walking around without getting too noisy or trespassing can sometimes give the agent a better look and more information. Sometimes agents even find that the property is no longer occupied.

The Internal BPO

Real Estate Agent in a house
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The more thorough type of BPO, the internal broker price opinion, requires a great deal more in the way of information, valuation work, and photos. Learn what most internal BPOs require, as well as additional services brokers frequently perform.

It is important to follow the instructions of the lender and take care to fill in the forms properly if you want to get paid. Also, photos should be taken as the instructions direct. If they want front, rear, and side views, make sure you get them all.

NABPOP: The National Association of Broker Price Opinion Professionals

For those wishing to learn about doing BPOs, the National Association of Broker Price Opinion Professionals (NABPOP) is a good place to start. You won't feel your membership fee is wasted, as you'll also be placed on a network so that BPO purchasers can find you. Learn about NABPOP here.

BPOs May Mean Listings

Some brokers want to do BPOs because they have a chance at a listing. Even if they do not, they will have advance notice of possible foreclosure properties coming online and they know their condition.

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Tammy Broxson

Tammy Broxson is the Broker Owner of Broxson Real Estate Group, a boutique real estate brokerage in Florida. Tammy is also a State of Florida Real Estate Instructor and a mentor to other real estate p....

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