When is a BPO or Broker Price Opinion Used?

A BPO, or Broker Price Opinion, is a tool used by mortgage lenders, banks and others to value a property in the current market. The reasons and timing for using a real estate broker for a BPO might include:

The cost of an appraisal is to be avoided.

Delinquent payments and pending foreclosue.

In a refinance situation.

When refinancing for lower rates or other reasons is a booming market, lenders are doing a great many of these loans. In many cases, the home has a recent mortgage where a full appraisal was performed. To lower costs, the lender may decide to hire a real estate broker to do a BPO, or broker price opinion.

In cases where a lender is considering foreclosure, or even if they are working with the borrower to come up with help with their situation, the lender will order a BPO. This allows them to get a reliable estimate of the current value of the property, compare it to the mortgage balance, and recommend solutions.