In the real estate industry, BPO is a whole different thing. It stands for broker priced opinions or simply, BPO. It is associated with foreclosures and short sales, but other companies such as relocation firms also order BPOs.
So what is a BPO?
A BPO involves a similar process as a real estate appraisal. But it is not as involved nor as complicated which makes it a cheaper option.
There are also two types of BPO. An interior BPO and a drive-by BPO.
A drive-by BPO involves assessing the home only by its exterior, and it isn’t much more useful than a hastily conducted interior BPO. The agent may not have even personally inspected the home’s exterior, and they may not even live in the same country as the home being sold. Instead, they rely on the home’s photos already posted on a multiple listing service (MLS) website.
On the other hand, a drive-by BPO is referred to as a desktop BPO. specialized software has been used to estimate a value. This works similarly to the types of values estimated by some popular websites such as the Zillow Zestimate. It can be accurate to a certain level. But it does not replace an interior inspection nor is it a full-blown appraisal.
BPOs don’t necessarily follow a standard format, which means that they may look somewhat different based on the individual practices of the broker. Despite that, some elements are pretty standard for most BPOs.
This section typically includes a property’s address, descriptions of all buildings on the property and their dimensions, a map of the site, and aerial images of the property.
This will include data about the property’s condition, how it can be accessed, and the visibility of the overall site.
This will look at whether the property complies with local zoning rules.
This will examine the overall neighborhood and may include the broker’s insights as to whether area property values are increasing or decreasing.
This will include specific information about the comparable properties that the broker or appraiser is using to estimate the property’s value. Notes will generally be added to explain any significant differences between the subject property and the comparison properties.
The proforma is a set of projected numbers that can help an investor understand a property’s potential profitability for the year or years to come. It may include projections of the property’s GPI (gross potential income), NOI (net operating income), or other essential metrics.
The section may include some analysis of a property’s rent roll, which could impact the estimated value of the property. For instance, if a large proportion of tenants are behind on their rent, the broker or appraiser may reduce the estimated value of the property.
This section looks at the overall market, incorporating economic, employment, and real estate development data, as well as a variety of other significant trends.
Finally, the valuation part of the report will combine data from all other aspects of the BPO to generate an estimation of market value.
Here at Magellan Solutions, we have a highly experienced management team. They will be with you every step of the way from pre-sales to implementation and continuing through your day-to-day operations. Our staff is thoroughly screened to meet strict qualifications requirements and trained specifically on the tasks for your business. Our ISO certification is focused on information security & integrity. Protecting your data and providing you with peace of mind is our priority. You can rest assured knowing that even though your work is being completed from across the globe, it’s being handled with the utmost attention and adherence to strict international security standards. Attentive Management, competent staff, and rigorous data security are paramount to the way we do business and serve our clients.
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