Thursday, April 4, 2013

Legal Question: What is a BPO?

Legal Line Question of the Week
Broker Price Opinions
QuestionWhat is a BPO?
Answer“BPO” stands for Broker Price Opinion.  A Broker Price Opinion is 
prepared by a real estate broker to provide an estimated value 
of the probable selling price of a subject property where the 
requesting party does not want to incur the expense of an appraisal 
of the subject property.  The real estate broker determines the
 probable selling price of the property by analyzing various factors, 
including but not limited to comparable properties in the area.  
Broker Price Opinions are generally prepared for a fee.  Recently, 
the Department of State clarified that only a real estate broker 
can collect a fee for preparing a BPO.  Accordingly, real estate 
salespersons and associate real estate brokers cannot receive 
compensation directly for preparing a BPO.  The fee for preparing
 the BPO would be paid to the real estate broker and the real estate 
broker, would, in turn, compensate its salesperson or associate broker.

By: Neil B. Garfinkel, 
REBNY Residential Counsel

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