Mortgage Note Selling and Property Valuations

2010 July 31

A lot of note sellers ask if an appraisal will be needed. The answer is in the perceived risk of the private mortgage note. For notes that are riskier due to only a small amount of equity, appraisals are always required. For notes with a lot of equity and low borrower credit risk, particularly equity from a down payment, a mortgage buyer may only order a BPO. A BPO is a “Broker’s Pricing Opinion” or basically a real estate broker’s (or agent’s) opinion of the value of a piece of property.

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