Broker Price Opinion
First of all, A Broker Price Opinion is not an appraisal, but is more than a Comparative Market Analysis (or a CMA).
A Broker's Price Opinion (commonly called a BPO) is the process a hired Real Estate Broker or sales agent (under the supervision of a Broker) utilizes to determine an opinion of the likely selling price of a real estate property. BPOs are popularly used in situations where lenders and mortgage companies believe the expense and delay of an appraisal to determine the value of properties is unnecessary. A financial institution will order a BPO from a Real Estate Broker in which the broker will do a drive by BPO or an interior BPO. The most common is the interior BPO, as it is important when determining an opinion of likely selling price, to know condition and amenities in order to see how the property compares or differs from the competition.
BPOs can be (and during the bubble crash was) a side income for Real Estate Agents and Sales Agents because BPOs are an ideal prospect to evaluate their markets, acquire and perfect pricing skills and knowledge. Real Estate Agents and Sales Agents create a fortified relationship and rapport with the Financial Institutions who hire and rely on their accuracy. An agent with extensive experience in this area develops a keen sense of what the market will pay for amenities and condition.
What is the difference between a BPO and a CMA? The details between comparable properties and your home are the difference. A standard CMA will not provide that. Most of the time; details do make a difference. For example; your home has a pool and the comparable does not. Or, your home is a fixer upper and the comparable is a complete remodel. You would probably agree that many times the differences can make a big difference on what listing price you decide on.