Broker Price Opinion versus a CMA also known as comparative market analysis are very similar with exception to who they are requested by.
Broker Price Opinions also known as BPO’s are usually requested on the behalf of a bank to determine values usually in the scenario of a Short Sale, Preforeclosure, Foreclosure or in some cases a refinance.
The CMA is commonly requested by active buyers and sellers in the real estate market to determine value. For buyers, the CMA is important to ensure they are not overpaying for a property. For sellers, it is usually to determine value prior to listing the property on the open market.
BPO and CMA as Comparable
The BPO is very comparable to that of a CMA in that they usually provide the following analysis:
- Subject Property – This will detail the specs of the subject property.
- Market Conditions – This will disclose the overall mico market conditions in the area of the subject property detailing if the market is stable, unstable, supply amount, value increase / decrease, etc.
- 3 Sold Comps – These will be narrowed down to the BEST 3 sold comparables to the subject property.
- 3 Active Comps – These will be narrowed down to the BEST 3 active competition comparables to the subject property.
- Valuation – This will discuss the market value opinion and provide a suggested price / opinion of value.
Now both the CMA and the BPO can go into much more detail depending on the client requests as well as the real estate agent providing the opinion of value.
Cost Of BPO and CMA
The costs of the BPO by the banks in my experience are usually around $40-$80. They are much less expensive than that of an appraisal, which is why many banks will use real estate agents to perform BPO’s as they are very cost effective.
The CMA’s are usually provided by real estate agents to buyers and sellers at no cost. The real estate agent’s objective is to work to get a commission upon a successful sale either listing or selling a property.
How Long Does It Take To Complete A BPO or CMA
This will vary as in most cases the agent will need to drive to and access the property. In most cases, after accessing the property the BPO or CMA will only take 20-30 minutes depending on the property type. Driving to the property and accessing could take upwards of 30-60 minutes depending on drive time, etc.
A desktop BPO or desktop CMA is where an agent provides an estimated range of opinion of value with the information provided and without accessing the property. In this case it should only take 20-30 minutes to complete.
BPO’s Are A Great Source Of Income
If you are a real estate agent looking to make some side income, BPO’s can be a fantastic option.
BPO’s will also provide real estate agents the opportunity to hone in on their skills in evaluating real estate. Which is extremely important in selling real estate.
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