How much a BPO costs and how to order one
BPOs are often cheaper than formal real estate appraisals and cost anywhere from $80 to $150 depending on the turnaround time, the type of BPO, and the location of the asset. A bank, lender, or investor can order an exterior BPO that provides a suggested value based on what the broker can see from the outside of the property or an interior-and-exterior BPO.
An interior BPO is far more accurate than an exterior BPO because the Realtor can see the condition of the home's interior, including any features that would add to or decrease the value of the property.
With an exterior BPO, the agent conducting the broker's price opinion can only base their value on an assumption of the interior condition relative to the exterior. It's not uncommon for vacant homes or homes in foreclosure to look great from the outside but be in very poor condition inside, or vice versa.
Additionally, BPOs are typically ordered without the homeowner or borrower's knowledge or prior approval, making interior BPOs difficult or impossible in many circumstances.
BPOs are often used for:
Several companies offer BPO services across all 50 states, such as First Valuation, Summit Valuations, Clear Capital, and LRES.
Things to know before ordering a BPO
Although BPOs can be very helpful, it's important to remember that they're simply opinions. It's not unusual to receive inaccurate BPOs, which are especially common with exterior-only opinions.
Although it’s not always the case, many agents working for BPO companies are newer agents who use the income from BPOs to support themselves as they build their real estate business. For this reason, they may not be as experienced in the art of evaluating properties, although most BPO agents do go through formal training or licensing.
Broker's price opinions help bankers, lenders, and investors gain insight into an estimate of property value, especially when a formal appraisal or CMA is not an option. Because they're more affordable than an appraisal, they might be the right option for you.