Doing BPO's

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Doing BPO's

Philip Rowe
Investor · Washington, DC · Member since 2008 · 44 posts · 15 votes

I have been reading the Bigger Pockets Forum for a few days straight and have found that the best way for me to get my "foot in the door" with REO's is to start doing BPO's.
Give me the address, and I can give you comps and a price range in all areas of my City. I understand that a BPO is a Broker Price OPINION. Thats the part where my question comes (Opinion)! I see that relationships are everything in this business and if I am offered to do a BPO I don't want to screw it up. Also, when I approach Asset Managers I don't want to sound like a total newbie so...here I am.

Can someone who has experience doing BPO's give me a brief rundown of the process. I imagine it is a lot like doing comps?
When I have a buyer for a particular property I always have a PRICE that I state it should be bought for. I can take my CMA's to the seller and use those FACTS to negotiate to the right price.
That being said... in todays market, asking prices still seem a little inflated in most homes that are listed on the MLS. Any experienced agent knows that Asking Price does not reflect Market Price, instead its the CLOSED SALES, and EXPIRED LISTINGS that are more of an indicator.

Does the bank like the BPO to reflect the TRUE Market Value, or are they looking for more of an "inflated price"? I saw on 1 post that the bank usually offers the Listing to whomever has a higher BPO, but I would rather be Accurate, as opposed to complient.

Any discussion on this issue would be greatly appreciated!

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  • Scott Ficek
    Real Estate Agent · Minneapolis, MN · Member since 2008 · 193 posts · 7 votes
    18y

    Here is a great eBook that I bought on the subject of BPOs.

    http://www.nicoleocean.com/

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  • Lauren Beth
    Residential Real Estate Agent · NJ · Member since 2008 · 10 posts · 0 votes
    18y

    HI

    I do bpos for several companies ... The biggest problem and why it is a "opinion" is that unless the property has an MLS history you have no idea what it looks like inside which in the real world of RE would never be the case. For a CMA... you have seen the property at least and can judge from there pluses and minuses. Usually I just go by the exterior condition and assume the same for the interior. The books say the take 1/2 hr to complete but It usually take me more like 2hrs not including the time for going to the property and taking the photos- I am pretty thorough and I don't make things up...I have heard that others have "scripts" and just cut and paste- so they cut the time. I actually enjoy them and I get so many I just hired someone to do the data entry...going back to your ? When I get the BPO it usually will tell you what value they look for either FMV or REO. Never do they want inflated prices that is not he purpose of BPO's. Anyway good luck with them ...do a good job and you will be inundated with BPO companies trying to get you to work for them.

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  • Deadrian Troupe
    Real Estate Investor · Atlanta, GA · Member since 2008 · 19 posts · 1 vote
    18y

    How did you get started with BPO's ?

    Do you see more success with BPO's ?

    Inquiring minds want to know. (well I do)

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  • Lauren Beth
    Residential Real Estate Agent · NJ · Member since 2008 · 10 posts · 0 votes
    18y

    I started by a phone call from a BPO company asking if I'd do a BPO for them..I do not know how they got my name.. Following that I signed up with other agencies and now I do about 10-15 a week- I here that other RA are doing alot more but I am in a pricey area and our market although very slow is not as bad as some of the other states where REO's are running the market.
    I am not sure what you mean by having more success???

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  • Robert Mack
    Real Estate Investor · Bergen County, NJ · Member since 2008 · 390 posts · 72 votes
    18y

    Hi Lauren,

    I am also from NJ, Bergen County. What part are you in?
    Were you doing BPO's at all before that "call".
    Can you tell us how you started doing BPO's, what books to read or education to get... and some of the NJ BPO companies?

    Thanks!

    I tried sending you a PM but it said your name "laurenbeth" wasn't being found...?

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  • Lauren Beth
    Residential Real Estate Agent · NJ · Member since 2008 · 10 posts · 0 votes
    18y

    I actually had never heard of BPO's b4 the call- you can try again sending me a pm- it worked for me? In order to do them I believe you need a RE license are you a Realtor in BC ... where

    Lauren

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  • Lauren Beth
    Residential Real Estate Agent · NJ · Member since 2008 · 10 posts · 0 votes
    18y

    I ordered some info on line but did not find the info very helpful- I just go by trial and error and after you do 10 or more you start to get the hang of it. I still am not sure if I do them well or not but I have been in the business for 13yrs and have a pretty good idea of values in the area - so once I see the house and take photos I have a general idea of the price range I should be valuating around- Don't waste your time buying the info on line most of it is really vauge

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  • Philip Rowe
    OP
    Investor · Washington, DC · Member since 2008 · 44 posts · 15 votes
    18y

    laurenbeth,

    I am glad I finally stated getting a response on this post. I didn't check it for a few days and appreciate your feedback. I think I have a pretty good idea on how to start doing BPO's but I don't want to ask questions or look like a total rookie. If you would be so kind to send me a BPO you have done I would like to look at the format and check out the info you supplied. Is it simply you give the bank/asset manager a Price and thats it? Do you supply comps in the area? How long is your report? 1 sentence, 1 paragragh, 1 page, several pages?

    When I put packages together for my investors on a particular property it is usually about 10 pages. It shows, The listing, Pictures, Tax Records, Comps on the area, The comps mapped, listing history, and sometimes listings of the comps. I find a lot of properties that need rehabbing and I have been to enough inspections, and have friends who are general contractors to get a pretty good estimate of repair costs as well. I am very thorough at what I do. And when I do something I like to do it right, THE FIRST TIME. ...Hence the original post...

    Again, if you could send me an example of a BPO it would be very grateful, my e-mail (hope this is okay? moderator) is [email protected]

    However, I am sure that everyone else, would love to see it as well so if you could post the example on this forum, EVERYONE would be most appreciative.

    Thanks for your comments. I love feedback, too. (bad or good)

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  • Daryl Carmichael
    Residential Real Estate Broker · Los Angeles, CA · Member since 2008 · 10 posts · 0 votes
    18y

    How difficult is it for brokers that aren't currently doing BPOs to get in? I've seen sites where they are asking you to do them for free. Is this even worth it? Or should I just try and sign up with companies and see if I'm contacted by them?

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  • Lauren Beth
    Residential Real Estate Agent · NJ · Member since 2008 · 10 posts · 0 votes
    18y

    Sign up with as many as you can eventually you will get them- You need a blackberry or pda so you can answer as soonas they are sent- It is usually sent to many realtors at the same time and the first to accept is the one who gets the job- Once you establish that you are reliable you will get more and more.
    lauren

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  • Gregory Wesley
    Residential Real Estate Broker · Houston, TX · Member since 2008 · 68 posts · 3 votes
    18y

    Google BPO company or Broker Price Opinion. You'll find many companies to sign up with!

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  • Paul Cordero
    Scottsdale, AZ · Member since 2008 · 342 posts · 15 votes
    18y

    I would say that your best bet for becoming an REO agent is to create a good relationships with an Asset Manager.

    Most large banks use some type of asset management company (AMC) to manage their portfolio of REOs. AMCs are in charge of assigning agents. Usually the bank doesn't make the decision for the BPO, the AMC does.

    I work for a servicing company who also owns a portfolio of REOs. We use three different AMCs. The AMCs to do most of the coordinating with all other parties. They usually pick an agent right after the foreclosure sale, when the file is assigned to them from us. The agent will have to monitor redemption periods, evicitons, schedule rekeys, winterizations, repairs, etc. Often, the REO agent will have to come out of pocket for these expenses, and get reimbursed by the AMC. It may take 30+ days before they are reimbursed for their expenses.

    Everyone in our REO dept have RE licenses, so we know how agents work. We don't take lightly to agents who wine about 5% commission, or aren't willing to work for the listing, so ultimately, we have the power to switch agents any time we want to.

    If you become an REO agent, be prepared to work, and sometimes for a little commission (we pay $2500 or 6%, whichever is greater from $1-$250K, then 5% after that). Once the agent lists our property, we require them to do a monthly status report every 30 days, then an updated BPO every 90 days. Some of our agents get assigned to very bad areas. I have had tenants greet agents with shotguns, and get mugged. One of our agents has 6 bullet holes in his car after he tried to negotiate cash for keys with a tenant in the worst part of Detroit. Its all part of the job.

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  • Gregory Wesley
    Residential Real Estate Broker · Houston, TX · Member since 2008 · 68 posts · 3 votes
    18y

    I learned the hard way about the upfront expenses. If you get several listings at once, you'll have thousands tied up in the properties. 30 days is a best case scenario. Depending on the AM, you could be waiting 60 or even 90 days. So have a credit card ready for this purpose.

    Paul,
    Do you guys have assets in Houston or Dallas? Let me know how to become a preferred broker.

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  • Stephen McKee
    Specialist · Riverside, CA · Member since 2008 · 382 posts · 72 votes
    18y

    I was broke and notice all these agents were bogged down with BPO's. Now what, I'll start a BPO buisness. I sent emails to all the REO agents in the MLS saying I would do there BPO overflow work. The first one took me 3 hours. I called an appraiser friend like 100 times. It was hardly worth the 80 bucks. After about 50 I had it down. They take me about 20 min now. Eventually all the agents I worked for asked me to come work for them. I picked the best one and wala I'm a partner in a REO firm. You gotta earn your wings first in this buisness.

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  • Johny Michaud
    Randolph, MA · Member since 2012 · 12 posts · 5 votes
    10y

    I know this is an old post but there is not a lot of info on line that can help you understand completely on how to start doing bpo.  My question is, if you are not working for a broker, would you be able to perform BPO.  Also, where can you start getting some business to get started?  Any help would be great.

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  • Josh Kundrat
    Chicago, IL · Member since 2015 · 77 posts · 39 votes
    10y

    You have to be a licensed agent under a sponsoring broker to be able to do BPOs

    0Reply
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