BPO is real estate shorthand for “Broker’s Price Opinion.” A BPO is a report prepared by a real estate broker providing data comparing your property to similar properties in the marketplace. The first thing a broker will need to do to provide you with a BPO is to inspect your property. Generally, we prefer BPO’s for vacant land lots, however, if for houses, the inspection will be very brief and not overly detailed, nor does the house need to be totally cleaned up and ready for an open house. It should be in such a condition that the broker will be able to make an accurate assessment of its condition and worth. You should have copies of the following documents and information available for the broker in advance, i.e. floor plan, number of bedrooms, bathrooms, other rooms, living area, property map, lot size. If you plan to make changes before selling, inform the broker at this time.
The next step is for the broker to obtain data on comparable properties. This data is usually available through MLS (Multiple Listing Service), but a qualified broker may also know of properties that are on the market or have sold without being part of the MLS. This will give the broker an idea of how much your property is worth in the current market. Please note that the BPO is not an appraisal. An appraisal is the highest and best opinion of value and must be performed by a licensed appraiser. If you are able, we strongly recommend you obtain an appraisal and we can direct you there as well.
The BPO is a good and reasonable assessment of what your house or land lot could potentially sell for.
BPOs are not only for prospective sellers. Buyers should consider requesting a BPO for properties they are seriously looking at to determine whether the asking price is a true reflection of the current market. Owners who are upgrading or remodeling can benefit from a BPO when it’s used to see if the intended changes will “over-improve” their property compared to others in the neighborhood.