Broker's price opinion

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For many years, "competitive market analysis" CMA and "letter of opinion" or "broker price opinion" BPO were terms of art used to describe the analysis and opinion used by real estate brokers when establishing a listing price. Competitive market analysis was intended to convey the idea that what was being analyzed was the housing market to determine a competitive listing price. Broker price opinion was used to distinguish the work of brokers from that of appraisers.

Eventually, "competitive market analysis" and "letter of opinion" BPO came to be defined in statute. According to ORS Administrative rules have been used to flesh out these statutory definitions. All is thought necessary to distinguish a broker's opinion on "price" from an appraiser's opinion of "value. The federal rule change caused something of a legal dust-up between lenders and appraisers that untimely lead to an exception being carved out of the brokers do price opinions and appraisers do value opinion paradigm.

This compromise and the traditional rules that distinguish BPO's from appraisals are now found in a single administrative rule. OAR broker price opinion letter example the express legal authorization for a real estate licensee to provide competitive market analysis and letter of opinion in the normal course broker price opinion letter example their business. The authority, however, is expressly limited to the "pursuit of a listing, to assist a potential buyer in formulating an offer or to provide a broker's price opinion, weather or not done for a fee" This limitation applies whether the opinion is done for a fee or not.

The rule specifically declares that the term "value" when broker price opinion letter example in a CMA or letter of opinion is not intended to mean or imply "value" as used in appraisals. If the dictates of OAR are followed, there are few problems. When the requirements of the rule are not followed, however, the result can be violations of real estate license law. It is, for instance, a violation of ORS A common way in which the limitation placed on the authority to do CMAs and BPOs is to do them for a home owner challenging a property tax assessment or a lawyer in a divorce case or other real property action.

It is not that CMAs and BPOs cannot be used in such context; rather it is that often the agents hired forget they cannot offer opinions of value and must use their CMA and letter of opinion authority only broker price opinion letter example pursuit of a listing or to aid a buyer in making an offer.

A seller who received a letter of opinion in contemplation of selling the property might later use the letter to contest a property tax assessment, but the agent could not provide the letter for the purpose of contesting the property tax assessment.

It is for this reason, that every letter of opinion should be accompanied by a cover letter that explains its purpose. Click here for a sample letter of opinion cover letter. Broker price opinion letter example to main content.

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A broker's price opinion is the process used by a hired sales agent to determine the potential selling price [1] or estimated value [2] of a real estate property. A BPO is popularly used in situations where a financial institution believes the expense and delay of an appraisal is unnecessary.

Broker's price opinions are initiated by financial institutions. The BPO is performed by a real estate professional who is acting on behalf of the financial institution. A real estate agent or a broker is hired to complete a BPO report on a property. A BPO may be occasionally requested without a fee in hopes that the financial institution, bank, or lender will receive a sales listing for the property.

The BPO professional then conducts the investigation. Many factors affect the price of a property:. The result is a brief report, usually two or three pages in length.

This report includes analysis of the property and neighborhood, photographs, comparable properties "comps" , and local and regional market information. In an automated valuation model AVM , a computerized mathematical model evaluates basic features of the property, compares to area sales, and determines a rough value. The calculation takes into account information about property size, bedrooms, and bathrooms.

An AVM is a basic evaluation — "just to make sure that the property value is in the right ball park" — and may be replaced by a full real estate appraisal. An individual who is looking to sell or purchase a home might request that an agent perform a comparative market analysis CMA [8] to determine a reasonable listing price or offering price.

Unlike a BPO professional, a real estate appraiser must be licensed or certified in most countries. A BPO is less thorough than an appraisal, [ citation needed ] although the process of deciding a price is similar to a residential real estate appraisal.

From Wikipedia, the free encyclopedia. Retrieved February 28, Retrieved 3 July The Art of Real Estate Appraisal: Dearborn Financial Publishing Inc. National Association of Realtors. What do all the different valuations mean? Consumer Financial Protection Bureau. A Professional Association with Training and Certification". Retrieved from " https: All articles with dead external links Articles with dead external links from July Articles with permanently dead external links Use dmy dates from February All articles with unsourced statements Articles with unsourced statements from February Views Read Edit View history.

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