A Broker Price Opinion is defined as what?

A Broker Price Opinion (BPO) is an estimate of value typically prepared by a licensed real estate broker or agent. It is commonly used in situations such as for banks and lenders when evaluating the worth of a property, particularly for bank-owned properties (also known as real estate owned or REO properties). The BPO gives a sense of current market conditions and property values based on the broker's expertise and knowledge of the local real estate market, often taking into account recent sales of comparable properties.

In contrast to a formal appraisal, which is a detailed and legally sanctioned valuation conducted by a certified appraiser, a BPO is less formal and does not carry the same weight as an appraisal. Its purpose primarily revolves around aiding the lender in determining the selling price for a property or assessing the property’s value for various lending purposes. This makes it particularly relevant in the context of properties that are in transition, such as those involved in foreclosures or short sales.