Broker Price Opinion (BPO)

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What You Should Know

  • A Broker Price Opinion is an estimate of the value of a property that is determined by a real estate broker, a qualified firm, or a qualified individual.
  • A BPO is not an official appraisal. It is a quick and cheap way to estimate the value of the property, but it is not a reliable metric for the market value of a property.
  • A BPO may be limited or fully prohibited by laws in some states.
  • BPO is relatively inexpensive and much quicker than a Comparative Market Analysis and an official appraisal.

Broker Authority

Unlimited Authority
Broad Authority
Limited Authority

What is a Broker Price Opinion


A Broker Price Opinion (BPO) is an estimate of the value of a property that is determined by a real estate broker, a qualified firm, or a qualified individual. It is different from both an official property appraisal and a Comparative Market Analysis. A BPO is based on the features of the property under evaluation. This is an informal property assessment, and it may differ greatly from an official appraisal. It is also not representative of the market value of the property. People or companies may prefer to request a BPO rather than Comparative Market Analysis or an appraisal because it is relatively inexpensive and much quicker.

A Broker Price Opinion is often performed for the following purposes:

BPOs are not allowed to be used freely in every state, so some people may not be able to receive a Broker Price Opinion depending on the state they live in. Some laws may prohibit the brokers to charge for such a service, which results in a lack of the service or a low-quality analysis provided. Some states restrict brokers from providing the opinion at all even if the broker has completed the right certification to do so. Other states may allow the use of a Broker Price Opinion under certain circumstances. To sum up, there are many restrictions in place to limit or fully prohibit the use of Broker Price Opinion in many states.

(as of January 2, 2019)

Unlimited authority – There are no limitations on real estate brokers and sales persons performing price and/or valuation analyses, including appraisals in non-federally related transactions. AK, IN, IA, MT, NY, OK, SD, VT, WI (9)

Broad authority – Real estate brokers and sales people may perform broker’s price opinions, competitive market analysis, etc. as part of the listing process and for other purposes. The broker or sales person may, or may not, be permitted to charge a fee for their services. AR, AZ, CA, CO, FL, HI, IL, KS, LA, ME, MA, MI, MN, MO, MS, NC, NE, NH, NM, NV, OH, PA, SC, TX, WA, WY, VA, USVI (28) ‘

Limited authority – A real estate broker or salesperson may only perform a broker’s price opinion, competitive market analysis, etc. as part of the real estate listing process. In some cases, brokers and sales people are prohibited from charging a fee or receiving any form of compensation. AL, CT, DE, GA, ID, KY, MD, ND, NJ, OR, RI, TN, UT, WV (14)

Pros and Cons of a BPO

Quick to CompleteNot Accurate
Cheaper Than an AppraisalIn Many Cases, Appraisal is Required
Can Be Used for Some ApplicationsState Laws May Limit or Prohibit BPOs

A BPO is a useful tool for estimating the value of a property quickly and cheaply. It can even be used for Short Sales, a Deed in Lieu of Foreclosure, Foreclosure Sales, Asset Valuation, or Refinancing a Loan. On the other hand, it is not an accurate estimation of the market value of the property, so even though it can be used by a homeowner to estimate the value of the property, an official appraisal is required before the sale and for mortgage purposes. Additionally, many states limit or fully prohibit the use of BPOs, so some homeowners may not have the opportunity to evaluate their property using this method.

How a BPO Works

A Broker or a qualified individual who provides a Broker Price Opinion usually looks at the features of the property, sales trends in the neighborhood, and values of comparable properties. The location of the property, surrounding amenities, comparable sales prices, and price trends are all considered in a broker’s opinion. A broker may also estimate the costs associated with getting the property ready for sale and any costs needed to repair the property.

What Factors a BPO Evaluation Considers:

  • Age of a Property
  • Size of a Property
  • Lot Size
  • Neighborhood and Surrounding Properties
  • Zoning Requirements
  • Conditions of a Property
  • Nearby Amenities

Even though a broker’s opinion is very similar to comparative market analysis and an official appraisal, due diligence is usually lacking in this type of analysis, which may lead to large differences in estimates between the analyses used. A Broker Price Opinion should not be considered a fair market value, but it can be used as an approximate estimate of the property value for people who are curious about that metric. Additionally, a mortgage broker may request a broker’s opinion to estimate the value of the property for refinancing or foreclosure purposes. The main benefit of a Broker Price Opinion compared to an official appraisal is that a BPO is much cheaper and can be performed much more quickly.

Two types of Broker Price Opinion can be performed:

  • External BPO

    External BPO, also known as Drive-By BPO, is a broker opinion where a broker estimates the price looking at the exterior of the property. Drive-By does not mean that the broker does not leave their car. It means that they estimate the property quickly from the outside, but they can still walk around the property to look at it from different angles.

  • Internal BPO

    A more thorough broker opinion is called an Internal Broker Price Opinion where a broker requests access to the property to review its condition and amenities included. It is considered a more thorough type of BPO than External BPO.

Broker Price Opinion is considered a concise Comparative Market Analysis. A broker does not spend too much time on performing the analysis, but they may request a payment for it depending on the state laws. They also may try to win the listing they are assessing. Because of that, they may provide a marketing plan for the property to show how they would approach representing the property.

Appraisal vs. BPO

More ExpensiveLess Expensive
More Time RequiredLess Time Required
More AccurateLess Accurate

Appraisals differ from BPOs in 3 important aspects: price, time, and estimation accuracy. It is important to note that a BPO cannot substitute an appraisal in many circumstances. A BPO can be requested only for limited purposes that do not require an accurate estimate. A BPO is suitable for estimating a property value for personal interest, refinancing, or foreclosure purposes. On the other hand, an appraisal, which is a more accurate estimation done by trained professionals, is often required before the sale or for getting a mortgage.

The 3 important aspects in which an appraisal differs from a BPO are:

  • Price: An appraisal is more expensive than a BPO. Price for an appraisal can vary from $300 to $600 depending on the size and number of units in the property. On the other hand, a BPO is usually half the price of an appraisal for the same property.
  • Time: An appraisal takes more time to conduct than a BPO. An appraisal is a more accurate estimating of the value of the property than a BPO, so it makes sense that a professional may take more time to conduct an appraisal than a broker to complete a BPO.
  • Estimation Accuracy: An appraisal is a more accurate estimate of the property value than a BPO. Because of this fact, an appraisal is more accepted than a BPO. Accuracy comes from the competency of an appraiser and time dedicated to estimating the value of the property.
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