As a real estate agent or broker, I have to believe a majority of your income is from commission derived from representing clients buying and selling homes. In most states, real estate agents have additional opportunities to make income. One of these options is by providing broker price opinion reports. Here we will attempt to answer some common questions real estate agents have about broker price opinion reports.
What is a Broker Price Opinion?
A broker price opinion is a valuation product used by banks, insurance companies, asset management companies and other corporate clients to get a potential listing value for a piece of property. The BPO uses comparable listings and sales to come to a potential listing price. Broker price opinions are often used for a property that is in foreclosure. For a good overview of real estate valuation reports, check out REVAA resources.
Is a Broker Price Opinion the same as an appraisal?
No, an appraisal is an official opinion of value completed by a licensed appraiser. Appraisers are licensed and complete reports along a set of guidelines common to all appraisals. A broker price opinion also uses a similar format but with less detail and some flexibility by the real estate agent. Ultimately, a broker price opinion is the agents opinion of the potential market price of real estate.
What is the difference between a BPO and a CMA?
In many ways, a broker price opinion and a comparable market analysis are the same. They both use comparable properties (both on-market and sold) and adjustments to achieve a recommended sale price. A broker price opinion goes beyond a comparable market analysis and requires additional information to give the reader, who often has never physically seen the property, context into items such as neighborhood, repairs and market dynamics. When you look at the level of research and complexity, an appraisal is the most complex. A comparable market analysis is the least complex and a broker price opinion falls between an appraisal and a CMA.
How much does a broker price opinion pay?
Individual companies who hire agents to complete broker price opinions set their fees. Generally these fees are different based on the level of complexity of the report. Also, report fees are negotiable. We consistently see fees between $40-$75 dollars for a exterior (no interior walk through) and $75-$150 for interior (full) BPOs.
Can a real estate agent complete a BPO?
The legality of a real estate agent completing a broker price opinion report for compensation varies from state to state. Some states require a disclaimer be written on the report. It is a best practice for a real estate agent to consult with both their broker and state licensing guidelines prior to completing broker price opinions for pay.
How do I get started completing broker price opinions for pay?
The first step in building a successful BPO business is to learn about the process of completing a broker price opinion report. Many companies who hire agents to complete reports also provide training via video on their expectations. In addition, the National Association of Broker Price Opinion Professionals (NABPOP) offers a training course. The National Association of REALTORS® previously offered a broker price opinion certification that has been discontinued.
Once you build your understanding of how to complete a broker price opinion report, you need to connect with clients who order these reports. There are many organizations that order broker price opinions from agents and pay for the report. Some of these companies include: Clear Capital, Pro Teck Valuation Services, CoreLogic, Xome Valuation Services, SingleSource Property Solutions and ServiceLink. And, there are many more clients. For a complete list of BPO sourcing companies, join the REO Agent Society.