A Note To all Lenders and Financial Institutions
If you want to get it right and get properties sold..I would concern yourself with the agents selected to do BPO's. Friday I received and order and I declined it...while some would think it was crazy...I did what was best for the market.
In all fairness don't think for a minute I do not need the income..I'm not above doing BPO's...and just like many others I need the income coming in or I won't sleep at night then again...doing something that I believe would hurt other parties..would cause insomnia!
First of all-doing a BPO 120 miles away does not make sense...business wise for myself, for the lender and definitely for the seller who is trying to sell their property.
I do not belong to that particular local board so I would have to use IDX...am I doing a service or disservice???????
For a mere $45.00-not only to drive that far...but to take 18 pictures and not sure of having access to the property...who knows what's in store for you once you arrive..upload the photo's and write their extensive report..I don't know..it seems to me...$45.00 may not be a fair price...a lot of times in life you get what you pay for!
Many BPO agents take photos and do not concern themselves with the shortcomings of a property...another words they take photo's and present it in a light they feel that they might get the listing. Jokes on you..if you haven't figured it out...many times BPO agents are rarely selected to list the property.
On top of that..we wonder why short sales do not turn successful...you ready big secret..because the numbers are wrong. I do not believe for a second you have to live or work in the area in which you do BPO's but I believe you must present the property in its true form...its really simple if you think about it.
If you do not have access to the local MLS and solely relying on IDX...you are doing a disservice...to the bank and for a desperate seller.
Really truly when you think about it...real estate is all numbers related. That's what the negotiators are looking for and that's what investors look for. And until the MLS is global for every city, every community and every subdivision...those utilizing IDX to do their BPO's is creating complication.
Lenders if you want better success with pricing and with actually disposing these properties...select an agent who will do the job right...make sure they have access to the local MLS but more importantly make sure when you ask agents to give price opinions... you request...
A property in its true form!
This post was inspired by Neal Bloom, "How Can the Market Value of a Home In Florida Go Up 30,000-dollars in 5-weeks"-..It's good to see him back but sure stinks to hear just another familiar story on a short sale real estate transaction.
About The Author: Midori Miller is a Real Estate Trainer and writes and trains Real Estate Training and assists sellers in short sale situations. Midori is a Licensed Florida Real Estate Broker, License # BK645709 and a member of the Daytona Area Association of REALTORS. Contact midorimiller@yahoo.com or (386)453-3236.
Then on the other hand, banks could use local realtors to list their properties and listen to their agent's opinion on value, condition and location.
Midori - Very simply well put. This isn't rocket science, it is about the numbers. As honest and clear-cut numbers as possible. These can only be found by an agent with access to the local MLS where the property is located.
Midori, I have also turned down bpo's thatare not in my driving area, 120 miles for $45.00 I would not even consider doing it. We have to also keep our files updated and make sure we have the zip codes that we cover correct so they will not not send us bpo's in area's we do not cover, I know occasionally they will still send them to us, when we decline we can just state it is out of our district. You are so right about pricing it right, in this market there is no room for inflated listings.
Have a great and successful day!
Banks don't know how to sell real estate.
The real estate industry will not recover until banks get out of the real estate business and stick to making mortgage loans and let real estate practitioners do their job.
I did one 14 years ago.
I have one buyer agent that does them. I have no idea why but she does 3-5 a week and said she is so use to them she can get them done quickly. I'd rather see her spend the time on working with a buyer but it is guaranteed money and it comes in consistenly.
We don't do them...sure wish that the people that did had some qualifications...I swear some of them got their license at Sears.....good call...it's not always about the money.
Seems to me that we are definitely doing a disservice by performing BPO's for the banks. Typically it seems that the orders are passed down to the least qualified agents who will do them just because it seems like easy money. Not the best motivation for a correct report.
I wonder if the brokers out there have considered the potential liability of having agents do a "Brokers" price opinion. I believe that there should be a defined difference between a CMA (performed only for listing purposes) and a BPO (performed for REO and short sales purposes). There should also be a higher education or experience requirement for performing BPO's.
In a rural area like mine where comps are few and far between, I advise my sellers that the $400 for a true appraisal could save them several thousand dollars in money left on the table. Perhaps we need to also insist that the banks pay for an appraisal rather than relying on the opinion of an agent that may or may not have the sellers best interest in mind.
I do not have any answers to this, but throw these questions out there in the hopes of generating some positive dialog.
That's because the lenders won't pay $350 for a real appraiser to come out...they would rather use us because they only have to pay us $45-$50 and still not get a very accurate one if they aren't from the area. If they were smart.....they would wait until a contract comes in and use the buyers lenders appraisal. If they do a BPO and then the actual appraisal comes in different...well then they both just wasted money.
120 Miles? That is insane! 120 miles here would be traveling to another state. How do you even get placed on a list to cover such a distance?
Midori --- I agree with Bill --- 120 miles is just insane. I respect you for turning that down. Your post makes perfect sense and I agree that I have not seen an BPO agent get the listing.
I would be spending the entire fee on fuel... not mileage, mind you, just fuel.
And they should use local agents that can give them real valuations rather than people that might be able to get something close by accident.
We have had several short sales that we have provided comps supporting our values and they have had to go back out and either have an appraisal, or a 2nd BPO done on the properties so we could get to closing. One we had to go to the MI company on as well as Freddie Mac as the bank was just sitting on the offer.
My point is these banks give these orders...and sometimes they are too costly to do and too far away! I only signed up for Volusia but yet this is in another county...if I was a creepy agent...I could have done it and with IDX and it would have been acceptable...the problem was it would bother me...and I would not be doing the right thing...for the bank or the seller...but most of all we should definitely show properties in its true form.
A good BPO takes time. Commuting time, time to photograph, time to download photos, time to up load photos, time to research comps and time to synthesize all the info. $45.00 for a drive by or $75.00 for an interior BPO is a ridiculously low fee to earn for several hours of work. I got tired of working so diligently for the promise of the coveted REO listing only to see them go to agents who did little to effectively market a property and many who didn't seem to fulfill their agreements regarding turning on utilities, yard maintenance and trash outs. I thought the concept of loss mitigation was to minimize the banks' loss on an REO asset but the way many of these REO listings are handled they only seem to be exacerbated.
Midori, so true what you say about BPO's. It is incredible when you have an Agent who has no clue of an area doing a BPO. Whenever I have a short sale listing and receive a call from an Agent I always find out where they're from to see if they know the area and then when the BPO value comes in way out of wack I'm ready to inform the Seller's Lender.
Neil above made an excellent point in stating that it would be wise to use the Buyer's appraisal because any way you look at it, if the Buyer's appraisal comes in below the purchase price, the Seller's Lender will reduce their approval value anyhow - he's right, save the money on the BPO.
I do a ton of BPO orders and have learned alot about my market. I highly suggest doing them in order to keep from getting a second job, because this 2nd job is related. I do not think my REO listings are a direct result, but my bank account is. I have actually made some good contacts along the way.
So far I've been doing BPOs with Protek and Main St Valuations. Signing up with multiple companies as I have a team of agents working with me now. Got a list of them on a site for under $20.00. Think they had about 135 companies with the URLs.. Anyways maybe this can help another agent. Here's the link.
http://bpolist.digitalcontentcenter.com