An essential element to completing a short sale is a BPO, which stands for Broker Price Opinion. Essentially this is the bank’s way of obtaining a value on the subject property. Not to be confused with an appraisal, this format requests an agent do an audit of the subject property and establish a Broker Price Opinion, the BPO. It is just that – an opinion of the value of the home, done by an agent, not an appraiser.

This opinion may have either a positive or negative result on the outcome of your short sale. First of all, as I stated earlier, it is “just and opinion” put forth by an agent. Hopefully, your agent is very familiar with the current market values of the homes in your area, and fully understands the entire scope of your short sale.  On the other hand, you may find yourself with an agent that may not be so knowledgable in this area, and their opinion of the price of your home may cause more harm than good in this situation.  In order to be a BPO Agent all that is required is that you simply put your name on a list.  The only license or credential that is required is a Real Estate License – something all Real Estate Agents must have anyhow.

If you use an agent who is an experienced short sale negotiator, they will know how to help guide the value of the BPO to end in a favorable result. The bank’s primary way of determining the value of the subject property is through a BPO, so if it does not come in at a logical price, your short sale agent may end up fighting for value during the entire process. In the end, this can prolong the sale of your home, and end in foreclosure – more than likely what was trying to be avoided in the first place. The best way to avoid BPO problems is to work with an experienced agent who understands the process and can positively influence and guide the value of your home in the right direction.