BPOs Vs. Appraisals

BPOs, or Brokers Price Options, are what banks use to determine sales value of foreclosure properties and are performed by realtors.

Appraisals are performed by licensed appraisers who adhere to the USPAP or Uniform Standards of Professional Appraisal Practice.

BPOs

Banks solicit networks of realtors who have applied to receive BPO offers from banks.

Often, banks require less than a half hour response time by agents for agreement to accept the assignment.

Many agents hire part time staffers, some in high school, to run multiple BPOs under their user name as an alternate form of income.

Appraisals

Appraisers use the local MLS system to evaluate comparable properties against the mandated requirements of the USPAP and often hire trainees or other staffers to run through houses checking off bathroom counts, fireplaces etc.

USPAP rules generally require on site confirmation that a particular house actually exists.

For townhouses and other very similar units, appraisals often use the county provided square footage data listed on tax assessments.

In larger homes, especially those with lots of angles and out buildings, an appraiser will show up with measuring tape and get to work at the more complicated task.

BPOs

Performed by real estate sales staffs, BPOs can exaggerate pricing to the general trend-- up or down-- as agents look to the future to determine value and bank BPO methodologies/software programs do not take subjectivity or market knowledge into account.

BPOs often include distress sales data such as a short sale or foreclosure transaction.

Appraisals

Appraisers use knowledge of market, such as a house on a dirt road or a known area of sinkholes or contruction materials or techniques (mass produced or custom craftsmanship) of construction to bump values up or down in numerous catagories resulting in more accurate readings of value.

BPOs

Banks pay $50+- for BPOs.

Appraisals cost $350-750+ depending on property.