What Is a Retro BPO? (AKA Retroactive BPO or Historical BPO)

The term “Retro” makes many people think of the 70’s. For real estate agents performing BPOs, “Retro” has a whole other meaning.

Quite simply, a Retro BPO is a Broker’s Price Opinion (BPO) that asks the real estate agent to give their opinion of value on a property as of a specific date in the past. It might seem strange, but it’s a useful tool which will be explained in this article.

Here’s an example of how a Retro BPO works: a bank or lender needs to know what a property was worth on 7/3/2006. They don’t want to know the value of the property today, they want to know the value as of 7/3/2006. The real estate agent needs to access their MLS program and look for comparable sales from that time period. The real estate agent will pretend that TODAY is 7/3/2006. For most broker price opinions, the lender wants an agent to go back in time, up to 6 months for comparable sales. With a Retro BPO, the agent will look back 0 to 6 months from the retroactive date – in this case, 7/3/2006. The real estate agent will look at comparable sales from 1/3/2006 to 7/3/2006 in this example.

Sales from before 1/3/2006 will probably need further explanation as to why the agent had to go back so far for comparable sales. Also, any comparable sales dated after 7/3/2006 will be rejected because they fall after the retroactive date given.

Super Simplicity

Performing a Retro BPO is very simple. There are normally no photographs required. The real estate agent will need to physically verify whether the property is still standing, in most cases. The actual Retro BPO form is also less involved than a standard Interior BPO. This is because there are typically no competitive listings involved like in a normal Interior BPO. Only 3 comparable sales, with no photos. What could be easier?

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What is the reason for a Retro BPO? There are several reasons – the #1 reason is to ascertain whether fraud was committed (mortgage and/or appraisal fraud). Some other reasons include probate, divorce, bankruptcy, and insurance. In some cases a bank will use it as a “checkup,” to be sure their processes/procedures were followed.

Whatever the reason, Retro BPOs serve an important purpose in today’s shaky real estate environment. For real estate agents looking for additional income, performing Retro BPOs is a good way to go.