I'm looking at a pocket listing to potentially purchase and flip. I have my own idea of what I think the the value of the property would be post improvements, but would like to consult with a local realtor for a second opinion.
I've elected not to sign any type of agreement with a local realtor, though I have put a backup offer on another home recently with the listing agent. I would like to ask him to do the broker price opinion for this new potential flip- He is aware I don't plan to sign an agreement, so doesn't have the incentive of a commission down the line, but I would like to be fair an compensate him for his time and efforts. I know it's unorthodox to pay for a bpo, but given the circumstances and wanting to be respectful of his time, how much do you think would be fair to offer to compensate them for the bpo?
@Henley H. I pay $125-$150 for a BPO when I pay for them
I used to do thousands of them back in the day for banks, insurance companies, asset companies etc.
Haven't done it in a long time.
The experience I can mention is the person you are wanting a value from doing a bunch of BPO's already or mainly selling properties and making a commission? The law's on BPO's vary by state and some only allow a broker/agent to do them in the chance of getting a listing versus actual payment.
Also the broker/agent unless a principal owner should review their IC ( independent contractor) agreement with the brokerage. Their brokerage might not allow or have E & O Insurance for completing BPO's.
Many appraisers also do BPO's but likely these days with so many regular home sales paying 400 to 500 a pop for appraisals likely do not do as many anymore.
The cost offered to complete the BPO, timeline to complete (days,weeks), location (rural, suburban, urban core), Exterior or Interior BPO, whether map photos or drive by photos are required,etc.
I do not think a broker/agent would want to complete a BPO for an unknown person as there is no surety of getting paid for the time invested. The person ordering might not like the value given and refuse to pay etc. This is why there are BPO mills where brokers/agent go back to them again and again for orders. They try to get 4 to 5 day turn around's so they can line up multiple picture orders in one trip to save time versus going out again and again for a fast turn around order. This is not a big of a deal in urban core areas but as you go out to suburban and rural the comps get harder to do and more adjustments are needed to be made which takes a lot of time.
The best ones back in the day were new subdivisions. A report would be needed by a lender. You could go to the new subdivision and there were tons of active comps and sold comps. You would get 150 for a quick 24 to 48 hours turn around and BPO was easier. In the down turn cycle there were almost no new builds and lot's of foreclosures and short sales which required lots of adjustments and repair estimates.
125-150 is typically a full interior BPO where they take pics inside and outside of the property. A drive by depending on area and timeline for external pics could be 50 to 100 dollars. You need to check what rates are today as i have not done them in many,many years.
Good luck. No legal advice given.
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