Property Valuation
What is a 'broker price opinion' (BPO) and how does it differ from a formal appraisal in Oregon?
AA BPO is more accurate than an appraisal
BA BPO is an informal estimate of value prepared by a real estate broker; a formal appraisal is conducted by a licensed appraiser under USPAP✓ Correct
CBoth are equivalent under Oregon law
DA BPO is required for all cash purchases; an appraisal for financed ones
Explanation
A Broker Price Opinion (BPO) is an informal value estimate prepared by a real estate broker or agent, often for lenders evaluating distressed properties. It is not a formal appraisal conducted under USPAP standards by a licensed appraiser.
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Key Terms to Know
Appraisal
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
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