Why Banks Need Broker Price Opinions – BPO

Why Banks Need Broker Price Opinions – BPO

Why Banks Need Broker Price Opinions – BPO

What is a broker’s price opinion?

When a bank or asset manager gets hold of a new foreclosure listing, they need to know the value of the home immediately. Typically, the bank will appoint one to three agents to estimate the approximate sale value of a home. These banks expect each agent to submit three comparable sold listings and three comparable active listings, as well as an estimate of what the agent thinks the home will sell for.

A broker’s price opinion is not as detailed as an appraisal and does not require as much work. BPOs differ from estimates in several ways:

  • Appraisals typically cost over $300. Most BPOs pay brokers between $50 and $100.
  • Estimates require detailed square footage measurements. BPOs rely on recorded county assessor measurements.
  • Appraisals use a standard format recognized and used by lenders and mortgage professionals for accurate property appraisals. BPOs are prepared in various formats and are simply used as decision-making tools by the asset managers of each bank.
  • Appraisals are usually 15-20 pages long with detailed information on every aspect of the property. BPOs are usually 2 pages long with information relating only to the final sale price.

Why do banks need broker price opinions?

Asset managers and banking staff make decisions on several properties every day. Reading a long 20 page review and filtering out the critical information is a waste of time. These asset managers need concise financial documents that facilitate their selection. This is why BPOs are so critical of their work. In addition, BPO saves the bank over $200 per property compared to a standard appraisal. This money adds up quickly and saves the bank thousands and thousands of dollars a year.

Another reason why BPOs are preferred by banks is that the turnaround time is much faster than estimates. BPOs can usually be completed by agents in less than 48 hours. Many appraisers visit the property within 48 hours, but then need another day or two to process the information and create the full report.

how agents can become a BPO agent

Once the real estate agent knows what the broker’s price is, he immediately wants to learn how to become a BPO agent and start processing BPO for banks. This is understandable as a good agent can make an extra $500 – $1000 per month just by signing up with banks and asking for BPO jobs.

The steps to become a BPO agent are quite simple. The main process takes about a week. Here is a summary of the basic steps:

  • Get List of BPO Banking Branches. Make sure your list includes over 100 banks and asset managers.
  • Register on any of these banks’ websites as a BPO agent. This process can take over 15 hours to register on all 100 websites, so plan your time wisely.
  • Contact banks and asset managers to make it clear that you want to handle BPO for banks and become one of their preferred agents.
  • Once you get your first assignment, do a great job and do your best to make sure your client is happy. It only takes a few solid bank clients to keep you busy with a steady stream of brokerage price opinion assignments.

When you start your quest to become a BPO agent, it is important to never give up. Once you start handling BPO for banks, your business will quickly start to snowball. Good luck!

#Banks #Broker #Price #Opinions #BPO

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