Feed on

Master the Short Sale BPO

Definition of BPO

BPOs are often associated with foreclosures and short sales, but other companies such as relocation firms order BPOs. A BPO stands for “broker price opinion,” and it involves using a process very similar to an appraisal.Companies hire a Destin Real Estate Broker to prepare an opinion of value. The representative of the broker, generally a real estate agent, compares three similar properties that have recently sold to the subject property and adjusts up or down for differences. The final result in an opinion of market value.

Broker price opinions are sometimes controversial, especially if the agent preparing the BPO has little experience or knowledge about the neighborhood. But BPOs typically cost less than a full-blown appraisal.

BPO’s are Also Known As: real estate agent appraisal


The BPO is the most critical step in the short sale process. It will determine whether or not the lender will allow a payoff that is low enough for a buyer to accept. Here we take up the short sale process at this critical point.

Work the BPO for a Successful Short Sale Approval:

  • Schedule the meeting with the appraiser/realtor to do the BPO. The BPO is the “Broker’s Price Opinion”; and sometimes a real estate broker values the property and sometimes it’s an actual appraiser. Your lender will decide who does this.
  • Prepare for the BPO. You job is to make your house look as ‘worthless’ and as much of a ‘liability’ as possible. Go to the local police department to get crime statistics for your area. Search online to find out if there are any sex-offenders in your area and print out the details. And if possible get three nearby sales of similar homes that support your buyers offer.
  • Meet the BPO agent at your property. Find out if the agent is aware of the situation. They are hired by the bank, so they are not likely to be very helpful to you. None-the-less, this is by far the most important interaction of the entire process. Without being pushy explain your hardship and offer your data to help them with their evaluation.
  • Allow at least 3 days for bank to receive the BPO. Then contact them to see when they will be deciding if your buyers offer is adequate to cover the short sale payoff that they will allow.
  • Call back again at least once a week to find out the status. The lender will eventually give you a counter offer. If necessary, provide additional information to support the offer. This may include a professionally prepared repair estimate detailing additional expenses that the BPO agent may not have allowed for.
  • You may go back and forth several times with the buyer and lender before getting a definite yes or no. (Each time you submit a counter offer to the bank you will need a new HUD prepared.) If the bank agrees to your buyers offer, get the short sale payoff in writing (a verbal commitment means nothing).

All you have to do now is make sure the buyer has the funds to purchase at the accepted payoff, which may require you to confirm that they are approved for a loan. (This step is essential because if the buyer cannot close within the allotted time – usually 30 days- you will need to find a new buyer and start the whole process over.)

One Response to “Master the Short Sale BPO”

  1. […] « Homes for sale in Destin FL Master the Short Sale BPO […]