What Is a BPO (Broker Price Opinion)?

A Broker Price Opinion (BPO) is a professional estimate of a property’s value. A BPO is prepared by a licensed real estate agent or broker who uses their expertise and local market experience to make their valuation. This opinion helps buyers and sellers determine appropriate home pricing.

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It’s vital to understand what a BPO is when you’re trying to buy or sell a home. Real estate can be complicated. But don’t worry. We are here to make things simple, so you can put the power into your own hands.

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First things first, it’s important to clarify that a BPO is not the same as a real estate appraisal. While a BPO provides an estimate of market conditions and home prices, an appraisal is the gold standard of home valuations. Appraisals are more thorough than a BPO, which is why they are required by lenders to secure a mortgage or refinancing.

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We’ll also cover another option that’s faster and more affordable than either a BPO or appraisal, without sacrificing quality. Jump to the end of the article to learn why the Fair Deal Zone report is an ideal option for fast, accurate home pricing verifications.

Two Types of Broker Price Opinions: Internal vs. External

There are two main types of BPOs: Internal and external. Here’s what those could mean for you.

Internal BPO: In-Depth Evaluation

An internal BPO is the more in-depth option. The broker visits the house and inspects its condition, layout, and any upgrades or repairs that may affect the home’s value. Because the process is so hands-on, an internal BPO gives a more accurate assessment of the home’s potential market price.

External BPO: Surface-Level Assessment

Not everyone needs an internal BPO. Some people are satisfied with an external or “drive-by” BPO. Basically, the broker visits the house but only draws their assessment from the outside. They take into account the curb appeal, exterior conditions, and neighborhood quality to make their valuation. 

Which BPO Is Best for You?

Honestly, it depends on your situation. If you need precise home pricing, go for an internal BPO. If you’re in a hurry, an external BPO might be a better option.

What Are Broker Price Opinions For, Anyway?

Broker Price Opinions have something to offer home sellers, home buyers, and homeowners. Let’s go through each of these below.

BPO for Home Sellers

For sellers, a BPO helps set a fair listing price. When you’re ready to sell, understanding home pricing can significantly affect how quickly your property sells and at what price. You want to avoid overpricing, which can lead to deflated interest and dropped prices—or underpricing, which loses potential revenue.

BPO for Home Buyers

For buyers, a BPO can help you know a home’s worth so you can make informed bids. Overbidding means overspending and underbidding could mean losing out on the house.

BPO for Homeowners

BPOs are also useful for homeowners looking to refinance their houses. For instance, lenders may request a BPO to see current home values. If you’re in the middle of estate planning or navigating financial decisions (like a divorce or foreclosure), a BPO can clarify your property’s worth.

How to Get a BPO

If you’re working with a real estate agent, you can simply ask for a BPO. The process is pretty easy. All it takes is contacting an agent or broker and outlining your needs for an opinion.

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Not all BPOs are the same though. The accuracy of a BPO is influenced by the broker’s experience, the quality of the “comps” (comparable properties) used, and even the professional’s on biases. That’s why choosing the right real estate professional is essential to getting good information.

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When making your decision, look for someone with a strong grasp of local market trends and a good reputation.

BPO vs. Appraisal

While comparing a BPO to a formal appraisal, there are several differences you should know.

Differences in Training and Expertise

An appraisal is completed by a certified professional who follows strict guidelines and standards. A real estate broker provides a BPO based on their experience and insights into the local market conditions.

Costs of BPOs vs. Appraisals

If you’re trying to decide between a BPO and an appraisal, think about how much you’re willing to spend.

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A BPO typically runs about $50 to $150 and offers a budget-friendly alternative to the $300 to $800 range associated with appraisals. But if you want or need the best home valuation possible, the extra money is worth it for an appraisal.

Reliability and Intended Use for a BPO or Appraisal

While BPOs can provide estimates for pricing, they aren't accepted for mortgage approvals, like appraisals are. If you're considering a lender for refinancing or purchasing, you’ll likely be required to get a full appraisal.

When to Consider a BPO

There are specific scenarios when getting a BPO is beneficial for both sellers and buyers alike.

When BPOs Are Good for Sellers

Selling your home? A BPO can give you a decent idea of your home's worth in the current market. This will help you set a competitive and fair listing price.

When BPOs Are Good for Buyers

For buyers, getting a BPO can help you determine if the listing price is worth it. These price opinions can be especially helpful for all-cash offers or on properties needing extensive repairs. This way, you enter the negotiation with better insight into home pricing.

Special Circumstances Like Divorces or Estate Sales

What if you’re not buying or selling a house? Why would you need a BPO? Well, there are special circumstances where you’d want to investigate your home’s value.

Divorces or estate settlements are two common examples. A BPO can help assign a fair market value for your property. This facilitates a smoother division of assets and helps you make informed decisions.

Why Reverified Is Better Than a BPO

A Fair Deal Zone report from Reverified is more affordable, fast, and impartial than a BPO.

Our unique Fair Deal Zone report is purpose-built to be easier to read than a typical BPO report. This means you can put the report to use without needing a professional to read it for you.

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The Fair Deal Zone Report is crafted to be more neutral and unbiased, not influenced by any potential vested interests in the sale price. It’s all about giving you the confidence to make smart decisions.

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Here’s how the Fair Deal Zone report works:

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1. You order a $49 report for a specific address.
2. Our innovative tech solution creates Property Clusters based on the most similar properties in an entire geographic area. This is much more in-depth than the few comps chosen by a broker.
3. We identify and rank 19 home features.
4. We go beyond automated valuation models by passing the report to one of our pricing experts. They use their own impartial expertise and experience to adjust for things that an algorithm could know.
5. You get your Fair Deal Zone report in 24 hours, indicating the ideal price range for the property.

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And that’s all it takes to get the answers you need to make smart decisions, like how much to price your home or how much to bid on a house.

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Order your own Fair Deal Zone report today to see how easy it is to get the home pricing answers you need.