subject: Broker Price Opinion Short Sale - A Reduced-Cost Option For Home Appraisal [print this page] Broker Price Opinion Short Sale Broker Price Opinion Short Sale
Broker price opinion references a strategy utilized by mortgage lenders to acquire property value. Bank loss mitigators often use broker price opinion reports to obtain estimated property values of homes in preforeclosure or short sale. BPOs are also used instead of traditional property appraisals when borrowers request a loan modification. Broker Price Opinion Short Sale
Home values obtained through broker price opinion are based on predetermined factors. These include property location, property condition, square footage, lot size and assessment of other homes in the area. Home prices are based on comparative analysis of the neighborhood as well as property condition. Property value declines when bank owned and foreclosure properties are in the area.
Two types of BPOs are available to mortgage lenders - Drive-by and Internal. Both provide estimated property value along with estimated repair costs. Lenders depend on broker price opinion reports to determine if real estate qualifies for the intended transaction.
Drive-by BPOs are conducted by licensed real estate brokers who drive by the property to gather information. Brokers provide an estimate of the home's square footage, number of rooms and lot size. The report documents the home's exterior condition, approximate age and available parking.
Broker price opinion reports also document information about the neighborhood. Lenders want to know the number of foreclosure properties, homes for sale, and average cost of homes sold, along with homeowner's association regulations, if one exists. Broker Price Opinion Short Sale
Internal BPOs require entering the home to obtain property information. Internal appraisals provide a more detailed report of property condition. Brokers conduct a thorough investigation to determine condition of ceilings, floors, walls, appliances, fireplace, plumbing, electrical and working capacity of HVAC units. Brokers must inspect roofing, siding, gutters, fencing and swimming pools.
Internal broker price opinion reports are often used with mortgage refinance and loan modifications. Participating lenders of Obama's Making Home Affordable program must carefully document real estate transactions and keep BPO records on file in order to receive incentive money.
BPOs are also used when lenders enter into short sale agreements. With short selling, lenders agree to accept less than the full amount owed on the home mortgage loan. Banks establish a listing price based on the aforementioned factors. Borrowers then list their property through a licensed realtor. Short sale homes are generally priced below market value to attract buyers.
Last, but not least, broker price opinions are used when borrowers apply for home equity line of credit. HELOCs are a second mortgage with a predetermined open line of credit. Homeowners can borrow against home equity when funds are needed for major expenses.
Mortgage lenders look at the loan-to-value ratio to determine if borrowers qualify for HELOC lending. It is more cost-effective for borrowers to obtain a broker price opinion than a full home appraisal. Broker Price Opinion Short Sale
Broker Price Opinion Short Sale - A Reduced-Cost Option For Home Appraisal
