RISMedia
  • News
  • Premier
  • Reports
  • Events
  • Power Broker
  • Newsmakers
  • More
    • Publications
    • Education
No Result
View All Result
  • Agents
  • Brokers
  • Teams
  • Marketing
  • Coaching
  • Technology
  • More
    • Headliners New
    • Luxury
    • Best Practices
    • Consumer
    • National
    • Our Editors
Join Premier
Sign In
RISMedia
  • News
  • Premier
  • Reports
  • Events
  • Power Broker
  • Newsmakers
  • More
    • Publications
    • Education
No Result
View All Result
RISMedia
No Result
View All Result

How Does a Broker’s Price Opinion in Real Estate Work?

Home Agents
By Bill Gassett
August 16, 2022
Reading Time: 3 mins read
How Does a Broker’s Price Opinion in Real Estate Work?

The term “broker’s price opinion” (BPO) is used in the real estate industry to describe a home appraisal that a real estate broker performs. A BPO is not an official appraisal but an opinion of the property’s value.

A BPO is not binding on either the buyer or the seller and should not be used as the sole basis for making a decision. A broker’s price opinion is similar to a comparative market analysis.

The only real difference is semantics. Banks and lenders often refer to evaluations by a real estate agent as a broker price opinion. Real estate agents refer to their evaluation work as a CMA or comparative market analysis.

Let’s look closely at the most important things to know about a broker’s price opinion.

How does a broker price opinion work?

A broker’s price opinion includes a detailed property analysis, including its location, condition, and amenities. The opinion also includes an estimate of the market value of the property.

Broker’s price opinions are essential for buyers and sellers to understand a property’s worth better.

A real estate agent will visit the subject property to get an idea of the value. There are two kinds of broker’s price opinions—internal and external.

Internal vs. external BPO

An interior BPO will be far more accurate because a real estate agent can get a true picture of the home.

Conditions, amenities, and floor plan layout will not be available without an interior visit. Standing from the curb doing an exterior broker price opinion will be challenging. There is too much that goes into a home value to be able to accurately predict value without stepping inside.

However, sometimes a bank will only want a quick opinion and don’t ask for an interior visit. The lender expects that the value could be off without an agent venturing inside the property.

Broker price opinion vs. house appraisal

A broker’s price opinion (BPO) is a document prepared by a real estate agent, whereas a licensed appraiser conducts an appraisal. This document is different from a house appraisal, which evaluates the value of a property made by an independent appraiser.

A BPO typically includes information such as the property’s square footage, location, and recent sales history in the area. An appraisal will also contain this information but will be on a standardized form that the appraiser submits to a mortgage lender.

Lenders, banks, and other financial institutions never accept a broker price opinion when lending money. Mortgage requirements do not permit it. Appraisers are independent third parties in a real estate transaction. On the other hand, real estate agents have a vested interest in a home sale.

What are the benefits of having a broker’s price opinion?

The benefits of having a BPO include:

  • You can negotiate a better price for the property if you’re a home buyer.
  • Having the chance to get an opinion of the property’s value when selling.
  • The ability to use the opinion as the basis for a purchase or sale agreement.

Cost of a broker’s price opinion vs. real estate appraisal

A broker’s price opinion gives property context and helps guide the negotiations between buyers and sellers. The cost of a broker’s price opinion is typically less than the cost of a real estate appraisal, which can vary depending on the size and complexity of the property.

A real estate appraisal can provide more detailed information about a property, including its value and potential improvements. The typical cost of a BPO ranges from $50-$150. The price of a home appraisal runs from $300-$500.

In a real estate transaction, the cost of a house appraisal is born by the buyer and becomes part of their closing costs.

Final thoughts on a BPO

A broker’s price opinion has its place in property evaluations. However, it should not be relied upon entirely. A broker’s price opinion accuracy depends on the person performing the task. Is it an agent with years of experience serving the BPO or someone who just got their real estate license?

It is possible you could get multiple BPOs and get different results. Property values can be very subjective. That is why they are called opinions.

Bill Gassett is a nationally recognized real estate leader who has been helping people buy and sell MetroWest Massachusetts real estate for the past 35 years. Bill is the owner and founder of Maximum Real Estate Exposure. For the past decade, he has been one of the top RE/MAX REALTORS® in New England.

Tags: Bill GassettBPOBroker’s Price OpinionConsumer Real Estate Tips
ShareTweetShare

Bill Gassett

Bill Gassett is the owner and founder of Maximum Real Estate Exposure.

Related Posts

How to Establish Yourself as the Real Estate Pro Your Clients Need
Agents

How to Establish Yourself as the Real Estate Pro Your Clients Need

February 6, 2023
Home Equity Flattened in Q4 2022
Agents

Home Equity Flattened in Q4 2022

February 6, 2023
The Keyes Company Expands Boca Raton Office
Agents

The Keyes Company Expands Boca Raton Office

February 6, 2023
Riding the Waves of Change: Introducing RISMedia’s 2023 Real Estate Newsmakers
Agents

Riding the Waves of Change: Introducing RISMedia’s 2023 Real Estate Newsmakers

February 6, 2023
Exit Plan: Top 10 States People Move to for Retirement
Agents

Exit Plan: Top 10 States People Move to for Retirement

February 6, 2023
Land and Retain Top Talent for Your Brokerage This Year
Agents

Land and Retain Top Talent for Your Brokerage This Year

February 6, 2023

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Tip of the Day

Three Secrets to Keep Momentum in 2023

Most real estate agents will ditch their resolutions by now. You don’t have to be one of them. Learn to... See More.

Business Tip of the Day provided by

Recent Posts

  • Get Cleaning—It’s Good for Your Health
  • Top 3 Trends in Metal Roofing
  • Let Technology Make Your Financial Life Easier

Categories

  • Spotlights
  • Best Practices
  • Advice
  • Marketing
  • Technology
  • Social Media

The Most Important Real Estate News & Events

Click below to receive the latest real estate news and events directly to your inbox.

Sign Up
By signing up, you agree to our TOS and Privacy Policy.

About Blog Our Products Our Team Contact Advertise/Sponsor Media Kit Email Whitelist Terms & Policies ACE Marketing Technologies LLC

© 2023 RISMedia. All Rights Reserved. Design by Real Estate Webmasters.

No Result
View All Result
  • Home
  • Premier
  • Reports
  • News
    • Agents
    • Brokers
    • Teams
    • Consumer
    • Marketing
    • Coaching
    • Technology
    • Headliners New
    • Luxury
    • Best Practices
    • National
    • Our Editors
  • Publications
    • Real Estate Magazine
    • Past Issues
    • Custom Covers
  • Events
    • Upcoming Events
    • Podcasts
    • Event Coverage
  • Education
    • Get Licensed
    • REALTOR® Courses
    • Continuing Education
    • Luxury Designation
    • Real Estate Tools
  • Newsmakers
    • 2023 Newsmakers
    • 2022 Newsmakers
    • 2021 Newsmakers
    • 2020 Newsmakers
    • 2019 Newsmakers
  • Power Broker
    • 2022 Power Broker
    • 2021 Power Broker
    • 2020 Power Broker
    • 2019 Power Broker
  • Join Premier
  • Sign In

© 2023 RISMedia. All Rights Reserved. Design by Real Estate Webmasters.

X