A Broker Price Opinion is an Opinion of Value for a property, " done by a local real estate professional or any other qualified company or real estate agent. BPOs are less expensive and are used to give an indication of the fair market value of a property.When providing the price opinion, brokers will consider the value of similar surrounding properties, sales trends prevalent in the adjacent neighborhood and any costs incurred in preparing the property for sale during a short sale or foreclosure.
The Difference Between Appraisals and BPOs
Although BPOs serve the same purpose as appraisals, the main difference is that appraisals are done by licensed appraisers and lead to a deeper analysis of the property. They are hence costly and more time consuming. Banks prefer BPOs for their lower cost and faster results.
Some of the things contained in a BPO are:
Exterior and Interior conditions of the property – Most BPOs evaluate the exterior conditions of the property and then file a report. A thorough BPO report should also contain interior evaluations with specific attention to detail needed to capture any defects. Photos and historical data must also be collected to advise the final estimate.
Comparing with similar Properties – A BPO report should include comparison data for at least three similar properties currently on ale in the same market and three other properties that have been recently sold typically in the last 3 months.These properties should be located within a 1 mile radius of the subject property.
Above Ground Living Area (AGLA) should be approximately +/-10% of the property under evaluation. This is mainly because finished basements are evaluated with lower weighting factor compared to property with an above ground living area.
Neighborhood Data – the BPO report should include the neighborhood statistics, useful to banks in giving a better understanding of what the market situation is currently.These conditions can point into a declining market or a stable one.
Repairs Sheet- the real estate agent should provide an estimate of what it would cost to repair any damages to the house.
Value Estimate – By basing values on recent sales of comparable property, the real estate agent will provide a 'quick sale' estimates of what the property can fetch in 90-120 days in the market.
In case you need a broker price opinion agent in the Seattle/Eastside area, contact Hamid. Clients who contact him before end of the month qualify for free CMA.
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