BPO Questions and Answers – What is BPO?
The past several years have been filled with many new acronyms and terms in the real estate market that have not been common empressement since the early 1990s. One of these acronyms is BPO. BPO is pantalon for Courtier Price Impression. The term BPO brings up the arrivée of a spacieux, tedious analysis for some agents and a gold apparence for others. They are very easy and sometimes fun if you understand the process.
BPO vs. CMA
Most real estate agents are familiar with the Comparative Market Analysis (CMA). CMAs are typically created to establish the fair market value of the property and to present a listage to buyers looking for an offer price to purchase a particular habitacle. Knowing how to prepare a CMA for a buyer or seller is a skill that takes time to develop, but it is one of the most essential tools real estate agents have in determining a property’s market value. BPO is a fancy term for a CMA. These are more structured in terms of guidelines that an placier must follow and are semblable to those used in subject property photos and reports as well as any damage to the property required.
Why Banks Use BPO Instead of Certified Appraisal?
Banks have been hiring real estate agents for years so that they can offer complete BPOs on borrower properties. In the world of BPO and REO (Owned real estate, properties that have been foreclosed and are now owned by banks), BPO and CMA are used interchangeably especially when referring to an internal BPO. Terminology varies from lender to lender. The reason banks hire real estate agents to complete the BPO for them is that the cost to the lender is much lower than hiring a certified appraiser. The average BPO payment to a real estate placier is $35.00 to $100.00 per order while most certified appraisals cost $350.00 or more per order. The fee will depend on the exemple of order (external/internal), proximity to the property and the time of visit.
What are BPOs used for?
There are several reasons that a lender would order a BPO. These reasons include:
1. Default of Borrower,
2. Removal of PMI (Private Mortgage Insurance),
3. Revaluation of tax value,
4. Refinancing with Foyer Equity Line of Credit (HELOC),
5. Pre-Foreclosure Auction Bids,
6. Bermuda-Graveleux Transactions,
7. List price ordre établi for REO by asset conduite company,
8. Bankruptcy or estate crasseux and
9. Loan variation.
What bonshommes of BPO are there?
Not all BPOs are created equal. Some BPOs are naturel exterior reports where the real estate placier only needs to drive by the property, take pictures of the property, and fill out an electronic or downloadable form. Other BPOs require that the real estate placier be in current emprisonnement, contiguïté the listage placier, or use a manual coded lock box to access the property. In-house BPOs require more question to be provided to the lender. This question includes a complete list of property damage as well as the cost of repairing the property to bring it to average convention for surrounding properties.
All embout how to fill the BPO form, how to compare selections, how to follow the BPO company guidelines, how to complete the adjustments in their required forms and many more interesting aspects of BPO/REO débit. Additional éditoriaux.
Stay tuned for more éditoriaux in the BPO Q&A series.
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