A Broker Price Opinion (BPO) is sought by an asset manager or a representative of a bank or financial service organization when they want to place a monetary value on their real estate portfolio. It is similar to a comparative market analysis a real estate agent does for home owners when they are selling their house.

When doing a BPO a real estate agent compares the livable square footage of the structure, the condition, and the amenities to other similar properties within close proximity to the subject property. It also includes estimates for interior or exterior repairs, if needed, and the timeframe required to sell a like-kind property. It includes multiple pictures of the subject and the street on which it is located, as well as the pictures of all the comparative properties.

A servicer can use this data to get the market value of the property which they can use to refinance(although not legal), sell, list the property as an REO, process a foreclosure, or trade the property with other banks or entities.

This process is similar to what an appraiser does when you are buying a house and when your bank orders an appraisal. It is much quicker and less expensive for the bank to use a BPO vs an appraisal.

Real estate agents see a flood of BPO orders when the market goes south and foreclosures are on the rise. They work with multiple servicers who need BPOs completed within 24-48 hours and the ones who do a good job and give timely reports are preferred by the asset managers who in turn reward them by giving them all their REO listings.