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I am a former BPO outsourcer for a major financial institution in the United States. I have answered every question an agent can have, from all across the country. I have developed this resource for agents to use so that they can find the answers they are looking for online. Explore the site!

You will find the answers to many common questions about Broker Price Opinions. If you are a real estate agent looking for quality information on filling out BPO forms, then you have found the right website. My experience will guide you through the process and make it easy for you.

Properly filling out your B.P.O. form:

GENERAL BPO NOTES-THESE PARAMETERS/GUIDELINES APPLY TO EVERY BPO, REGARDLESS OF VARIATIONS IN PROPERTY

· Sold comps must be less than 3 months old. If needed, go outside the 1 mile limit proximity to find newer comp(s). If there is a shortage of comps please state in comments section;

· Comps must be located within a 1 mile radius. Except if the market is slow and the proximity is expanded to find newer comps, or if the area is rural. If the proximity is expanded for any reason, please note it in the comments section.

· Please do not list sale price/date for the subject property in the BPO form. Only fill the list price if the property is currently listed;

· The actual price/Gross Living Area must be calculated for each comparable. Price/Gross Living Area: calculate value by dividing sales or list price/gross living area. The quotient goes in the appropriate field;

· Superior properties get (-) adjustment/Inferior properties get (+) adjustment

o For example, if the comparable has more sqft, rooms, amenities—it gets a (-) adjustment (superior property); if the comps have less sqft, rooms, amenities --- it gets a (+) adjustment. (Inferior property); older properties get (+) adjustment (inferior)/younger properties get (-) adjustment (superior)

· If an amenity/feature is not present, write “none” in the description field and “0’ in the adjustment field; also, if a property has the amenity, but there is no need for an adjustment, be sure to put “0” in the adjustment field.

Sales or Financing Concessions- write nature of concession, and make sure to (-) adjustment made for the amount of the concession or any amount paid towards closing.

Location- Typically not adjusted unless you are comparing urban to suburban or suburban to rural properties.

· Urban

· Suburban

· Rural

Site- level is superior to sloped, and hillside is typical superior to both, due to the view

· Level

· Sloped

· Hillside

View-positive is superior to neutral; neutral is superior to negative-None is unacceptable

Positive View Neutral View Negative View

· Mountains Street Commercial

· Ocean Neighborhood Highway

· River Homes Industrial

· City Lights

Design and Appeal-Design: one story is superior to split level and split level is superior to two story -typical adjustment is $1,000-$2,000 per story depending on the market in your area /Appeal: superiority of style is dependent on area

Design Appeal

· One story Contemporary

· Split level Traditional

· Two-Story Colonial, etc.

· Condo, Multi-unit, etc

Quality of Construction-necessary when comparing brick to frame or siding exterior, etc

· Brick

· Siding

· Frame

· Stucco

· Wood, etc

Age-adjustment typically made for properties over 10 years age difference, typical adjustment is $500/year. Newer properties are superior.

· Real age

· Year of construction

Condition- drive-by: exterior condition; interior-overall condition

· Excellent

· Good

· Fair

· Poor

For example: If the subject property is in “fair” condition, then adjustments need to be made for comps that are in better (- adj) or worse (+adj) condition by an amount that compensates for the difference.

Room count: number of total rooms, bedrooms, and baths

· NUMBER OF BATHS: This adjustment is based on the value and quality of the property. Properties with good quality of construction and value may be adjusted at a rate of $1,500 per half-bath. Properties of average quality and value may be adjusted at $1,000 per half-bath and properties of low quality and value may be adjusted at $500 per half-bath.

· NUMBER OF BEDROOMS: typical adjustment is 2K-10K depending on quality of property. (please keep in mind, this is the typical adjustment—adjustment could be more or less depending on the property)

Square Footage-actual difference in square footage between the comparable and subject properties.

Typical adjustment is 50% (price/gross living area):

Price/gross living area: calculate value by dividing sales or list price/gross living area.

The quotient goes in the appropriate field. (at top of BPO form under the sale/list price)

Square Footage Adjustment Calculation:

Subject: 1500 sqft

Comparable 1: 1600 sqft and sales price $160,000:

Price/GLA= $16,000/1600= $100/sqft----------50% of price/ GLA= $50/sqft

Difference in square footage: subject (1500) – comp. 1(1600) = 100 sqft

Difference in sqft x 50% (price/GLA) =

100 sqft x $50/sqft = $5000 adjustment

(Note: the adjustment would be negative because comp 1 has more sqft, which makes it superior)

Alternate Adjustment: You may use your discretion to calculate the square foot adjustment using another value. However, the value must be adequate and consistent.

Lot size-actual size of the plot of land where the property is situated- you may use acre(s) or sqft

There is no typical adjustment for this field. The adjustments vary widely based on location. This is one field where you may decide not to adjust at all, and it would be acceptable. If you decide to adjust, the adjustments must be consistent for all comparables.

Basement & Finished Rooms Below Grade

· Unfinished: an unfinished basement should be adjusted minimally, no more than $5 per square foot;

· Finished: Finished basements may be adjusted in a range up to the level of the heated and cooled square footage above.

Functional Utility-a property having attractiveness and usefulness-this is the ONLY field where yes/no is acceptable.

This adjustment comes into play only when the subject or comparable sales have a problem with functionality:

Yes: if all yes, no adjustment needed

No: If any are no, list problem with functionality and adjust accordingly.

Heating/Cooling –must list type of heating and cooling; yes or no is unacceptable

This adjustment is one of the few that may be dollar-for-dollar for the cost of the units. Most of the units these days are between $2,500 and $3,000. When a property has space heating and air, the cost of ductwork may add $1,000 to the adjustment.

Energy Efficient Items- This line is usually not an adjustment line, but if the comparables have single-pane windows compared to insulated or thermal windows for the subject, an adjustment of $1,500 to $2,000 may be made.

Other Energy Efficient Items: adjustment would be the value the items add to the property.

· Ceiling fans, Attic fans

· Appliances

· Tile Roof

Carport/Garage

· Carport –typical adjustment is $1,000 per stall

· Garage-typical adjustment is $2,500 per stall

Porches, Patio, Deck, Fireplaces, etc

· Porch/Patio/Deck: typical adjustment is $500 for each; typical adjustment is a rule of thumb, if you have covered patio, wrap around deck, screened porch—adjustment will be more.

· Fireplace: usual adjustment is $1,500 per fireplace, though custom fireplaces may warrant a larger adjustment.

Fence. Pool, etc

· Fence- typical adjustment for a privacy fence is $1,000, chain link fence is $500

· Pool- pools vary with size and value, but the usual adjustment is $10,000 or less.

· Storage Building- storage building with electricity is $1000, storage building without electricity is $500,

Other- miscellaneous adjustment, if no misc. adjustment is warranted, input ‘None’ in the field.

This field is used when an adjustment is warranted, but the BPO form does not allow for it.

Examples:

· RV Parking

· Boat Dock/Riparian rights

· Landscaping, etc.

Market Value/ Suggested List Price

The Suggested List Price must be greater than or equal to the Market Value

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