Property Valuation
In Minnesota, which of the following is TRUE about the difference between an appraisal and a broker price opinion (BPO)?
ABoth are interchangeable for all lending purposes
BAn appraisal is performed by a state-licensed or certified appraiser under USPAP standards; a BPO is an estimate by a licensee and is generally not used for originating new loans✓ Correct
CA BPO always provides a more accurate value
DAn appraisal is only required for commercial properties
Explanation
An appraisal must be conducted by a state-licensed or certified appraiser under USPAP and is required for most federally related mortgage transactions. A BPO is an estimate of value prepared by a real estate licensee, typically used for lender decisions on existing loans (short sales, REO valuations) rather than new loan origination.
Related Minnesota Property Valuation Questions
- In Minnesota, 'hypothetical conditions' in an appraisal differ from extraordinary assumptions in that:
- A Minnesota rental property has potential gross income of $96,000, vacancy and credit loss of 5%, and operating expenses of $32,000. What is the NOI?
- An absorption rate in a Minnesota market analysis represents:
- In Minnesota, 'market value' as used in appraisal practice is best defined as:
- In the cost approach to value, the appraiser estimates:
- External obsolescence in real estate refers to depreciation caused by:
- Demand for real estate is influenced by all of the following EXCEPT:
- In Minnesota, 'extraordinary assumptions' in an appraisal report are used when:
Practice More Minnesota Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Minnesota Quiz →