Broker Price Opinion companies, or BPO companies, are companies that are hired by banks, lenders and investors to determine the value of real estate. A BPO or broker price opinion is completed by a real estate agent or broker and is his or her opinion of value of real estate. Broker price opinion companies coordinate this process and serve as a liaison between the broker price opinion agent and the ordering institution.
The Need For Broker Price Opinion Companies
There are a lot of BPO Companies in today’s market due to all of the distressed properties. These companies receive large groups of orders from banks, lenders and investors needing to know the current market value of these properties. Banks lenders and investors order BPOs rather than appraisals because they are cheaper. A typical appraisal is around $350 and a BPO agent or broker receives $40-$75. Banks, lenders and investors do still order appraisals; however, not until needed. As an example, if a homeowner was selling their house as a short sale, the bank would typically order 4-5 BPOs during the process, which could span 2-5 years. Because the market is still declining it does not make sense to order an appraisal; however, they still need to know the value of the property, after receiving an offer they will order an appraisal to verify current market value.
How Broker Price Opinion Companies Work
The broker price opinion companies have networks of real estate professionals that they pay to take photos and complete online reports about the properties. Once these orders are complete the broker price opinion companies will review and return them to the bank, lender or investor (whoever ordered them).
Broker price opinion companies make a spread between what the banks pay them and what they pay the real estate professionals. These companies usually charge between $120 -$200 per order and pay the real estate professionals $40 -$90 per order.
Real estate professionals can make an incredible income from completing BPO orders. When a real estate professional properly builds a BPO business, he or she can receive anywhere from 10-100 orders per week, which in many cases can in turn produce six figure income. It is reported that there will be 8 million foreclosures over the next 4-5 years that will be around 32 million BPO’s. As you can see this is a very lucrative industry and will be for the next 4-5 years. If you are a real estate professional and are interested in building a BPO business, you can find the industry’s best BPO training at the BPO REO Academy.