A common question REALTORS and homeowners ask is: when is the BPO (broker price opinion) ordered? Here is the process that needs to occur before a BPO is ordered:
1. Your home needs to be listed with a real estate company and placed on the market.
2. Your agent is tasked with obtaining a market value offer on your home.
3. After you and your agent receive an offer or offers, it is you and your agents responsibility to obtain the best offer that can close the quickest (Within 30 days) with customary terms and conditions. The lenders will likely not pay for things that are not customary in your market.
4. After negotiations, you accept the offer and send it to the lender or lenders.
5. The lender will then order a BPO (broker price opinion) OR TWO OR THREE which will be completed by a licensed real estate professional who is licensed in the same state where your property is located.
6. Usually properties with higher market values (usually $1 million+) the asset company or BPO company may also be tasked to order an appraisal on your home.
Now to answer some common questions about the covered information:
Why does the lender/bank order multiple BPOs?
To ensure they're getting fair market value for the property.
Why don't they order appraisals for all homes?
It is much more expensive to order appraisals for all properties and it could mean hundreds of thousands more in monthly costs to a lender/bank.
I'm an appraiser and isn't this taking work away from me?
NO. This is extra work you may be asked to complete, but you are still part of the transaction just like before - if there is a mortgage involved then you will be tasked to perform that appraisal.
Why are they asking for the real estate agent to enter my home?
YOU and YOUR AGENT should ask for interior BPOs whenever possible to ensure the most accurate fair market value for your home.
What if we can't get what is considered "fair market value" for my home?
Your agent better be able to show high days on the market, details, and a complete explanation on why this cannot happen. AND IF THEY LENDER/BANK DOES NOT BELIEVE YOU, well...then that means they'll continue with the foreclosure process or ask that you start all over and get them an offer that is for fair market value.
A real estate investor offered to buy my home for less than fair market value, should I accept this offer?
IF it is truly all that is available or IF you are about to be foreclosed or go to trust sale, then MAYBE. Your team of professionals should be advising you on this particularly the real estate professional and/or the real estate Attorney.
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Contributor's Note
If you are currently contracted by a real estate professional for selling your home, do not construe this as "advice." These are conversation starters and things you may want to bring to their attention.
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