How to Influence Broker Price Opinions (BPOs)

Hi, this is Frank Chen with REIClub.com, the only site you need as a real estate investor. Today I've got quick video on how to influence the outcome of your Broker Price Opinion, also known as BPO.

What is a BPO?

• BPO stands for Broker Price Opinion.
• Real estate agent or broker assesses the property and gives their professional opinion of it's value to the lender. The closer that number is to your offer the better. You want the BPO to be as low as possible. Listed below is a snap shot of a BPO requirement.

1. Run comps and take pictures of the surrounding neighborhood, subdivision, or area.
2. Inspect the overall condition of the home and estimate the cost of repair. Take pictures.
3. Formulate their “opinion” of the estimated property value based on the information that was gathered.
4. Submit a detailed report of their research to the lender.

Step 1: Be Present during the Broker's Price Opinion

Trick: Only you have access to the key and they will have to meet you there.

Note: There are two types of BPO's: Request for a Full BPO

• Full Broker Price Opinions – The agent does a full inspection of the home.
• Drive-By Broker Price Opinions – The agent only takes pictures of the outside and other homes in area.

Step 2: Compile comps, estimated costs of repair, etc…(anything to justify discount)

• Comps – highlight ones similar to one being shown – remember: create ease
• Make two lists for repair costs – 1) cosmetic – obvious repairs such as wall damage, carpet, paint, etc. 2) Harder to see – i.e.: roof and water damage, faulty plumbing or electrical fixtures, pests, mold, etc. This list will contain more serious problems.

Step 3: If occupied, not present during BPO

• All communication between you and agent only

Step 4: Shadow the Agent – Look Professional

• Remember to point out all major repairs
• Take tons of pictures – agent may miss some
• Share the information you gathered – comps, repair estimates, etc… – remember: don't be pushy, you are working WITH the agent to gain approval from the lender

Towards the end of the BPO:

Step 5: Dig for more info…

• Ask the agent if they have a ballpark estimate They will most likely tell you that the numbers will be determined once they complete their report.
• At this time, ask when they will be finished and if you can give them a call at a specific time to get their final numbers. Note: The agent works for the lender and more than likely they will inform you that their report is proprietary to the lender. You have to feel that person out and see if they may be willing to share that information with you. It doesn't hurt to ask more than once if necessary.

It is important to let the agent know that you are very familiar with the neighborhood and tell them what you think the property is worth. The agent doing the BPO knows only what they have researched and what they discover once they actually see the property. You will be surprised as to how much your opinion matters. If the agent views you as someone who is educated about the property and the activity in the neighborhood, your opinion will be valued and taken into consideration when they make their report to the lender.

Again, this is Frank Chen with REIClub.com. Please take the time to leave your comments for this video below and please subscribe to our YouTube channel so you'll be automatically notified when we upload more quick video tips for you. Take care and good investing.