Role of the BPO Real Estate Agent
I was going to call this article "Don't Shoot the Shooter", (picture shooter that is) since people seem to get defensive when I'm on their street taking pictures of houses for comparables and BPO reports. It seems as if they have the right to tell me not to take pictures of their house or even the neighborhood. Why not, I'm on public property, right?
Maybe I will start writing a series of short articles of my BPO and REO property inspection encounters. People for the most part are cooperative and understanding, however once in awhile there's a special and unique individual that stands out from the crowd. I will do my best to protect their identity and the housing area I'm talking about, but the stories are simply incredible and must be told, but now its time to explain just what a BPO real estate agent does. Thanks for reading.
It's a Wednesday afternoon and you're watching TV after a long day at work when you notice a vehicle parked in front of your home with the engine running idle. You decide to investigate further and notice the driver is taking a picture of your home, what comes to mind?
You've just encountered "a shooter" someone who has been contracted by a third party company to take pictures of your home and report as to the condition and provide an opinion of value regarding your home.
Introducing the BPO real estate agent. The acronym BPO stands for Brokers Price Opinion, they are an abbreviated valuation report are used by banks, lenders, mortgage companies, servicing agents and third parties to quickly and efficiently determine the market value of their asset (your home), which if you have a note or mortgage on your home, it is their right to do so. The servicing agents and third parties may also use a report called a CMA, a Comparative Market Analysis, which is which very common in the real estate world.
What does a BPO agent look for and do while at your property? First you must understand there are two basic types of BPO reports. One is called the "drive-by", which is an exterior only type of report where the agent has to make many assumptions regarding the property condition since it may affect value. I am a BPO real estate agent located in Imperial Valley or Imperial County, California, and I perform many BPOs in El Centro, Brawley, Calipatria, Calexico, Imperial, Heber, Holtville, Westmorland, and other surrounding cities monthly for variety of national clients, so allow me to explain the BPO process to you in basic terms.
Typically a BPO real estate agent will take three to five pictures of your home for a drive-by or exterior BPO, although they may only use one picture for the final report, it all depends on the client. Most obvious, its important for the agent to take an unobstructed full frontal view picture of the home, this will help the agent determine the type of elevation (look) of the property and allow to compare to other similar homes in the area. Next a side view picture is taken to determine if there are any patio covers, guest houses or other buildings on the property in the rear yard that may affect value.
The agent will more than likely take a picture of the house numbers to verify the address of the property as well a street view picture is taken from in front of the home looking down the street which gives a snapshot of what the neighborhood looks like. Some agents will also take a picture of the street sign corner for location orientation, opposite street view picture, a snapshot of the other side of the home, or even the rear yard if an alley way or rear or side street abuts the home, a picture may even be taken across the street if there is a view or amenity that could affect value either positively or negatively.
Most BPO reports require the use of MLS (multiple listing service) listing and sold comparables to arrive at an opinion of value. Remember a BPO is not an appraisal. A BPO is an opinion of value range of a specific property at a specific point in time and are used internally by the bank for their purpose. Most banks and lenders who request these reports from third parties want to know if the home they've lent hundred of thousands of dollars on is still there or in good condition.
BPO reports are used for internal purposes of the bank or lender requesting them. Some have to do with "servicing requirements" which the word servicing means the bank or lending company who sends you the monthly mortgage statement and who you send your payment to, the ones who collect your money.
Generally banks and lenders will act as their own servicing agent, collecting payments, generating mortgage statements and providing analysis of your property taxes and insurance, called an "escrow account" (not to be confused with an escrow transaction involving the purchase, sale, or refinance of a property, however often times a servicing agent is acting on behalf of the bank or lender, which in turn they collect a fee for managing a portfolio of mortgages, which includes sending out the statement and the payment collection process.
As listed on your Note (the mortgage loan) and your Deed of Trust (in trust deed states the deed is your "pink slip" to the home, so to speak), the lender has a right to check on their collateral and to perform reasonable inspections of the property, most lenders do this with a drive-by or exterior BPO report.
What types of reasons a bank or lender may request a drive-by BPO? There are numerous reasons why a bank or lender may request a BPO, they may include, a transferring of your mortgage in or out of the portfolio (group of loans), your loan got sold to another lender and the buying lender wants to know what their collateral is worth, it could be for mortgage insurance (PMI) reasons, perhaps the homeowner is seeking a loan modification of their mortgage terms to lower payments and/or interest rate, maybe the bank is making a decision on a short sale or bank owned REO property status. The homeowner could be past due or delinquent on their payments and the bank wants to determine how much of a potential loss they're facing. A BPO can be used for preventive and factual purposes regarding determining value.
As many reasons as people borrow money is how many reasons why a bank or lender would request a BPO, in short, to get an quick snap shot of the market value of the home in order to make a decision. Most banks and lenders will order more than one BPO and many will also order an appraisal to determine how close the value ranges are amongst the reports to better help them in making their value decision.
Sometimes it becomes necessary for the BPO real estate agent to go inside the home and perform what is called an "interior inspection". These types of reports are for the same purposes as the drive-by, with the exception there are photos taken of each room and any damage or deferred maintenance issues that may affect the value of the property. Either way the BPO is an opinion of market value and often times include a value range of what a home would sell for in as little as 30 days, to regular sale marketing cycle time frames of 60, 90 and 120 day prices ranges.
The interior BPO is generally requested by a bank or lender when the property is in the process of being sold or transferred, such as by a short sale, or when the property becomes bank owned such as an REO status (real estate owned), or maybe even for a loan modification. The interior BPO provides more detail regarding condition of the home, as opposed to just viewing the home from the exterior or outside. More details about the homes condition, such as flooring, walls, systems, damage to the structure, etc go into each BPO report, while additional pictures are taken to give the bank or lender a better idea of what their collateral looks like and what condition the home is in.
Condition affects value and the banks need to know this before they make a decision on what the sales price is going to be with regard to a short sale or bank owned listing in order to sell the property in a realistic time frame without giving the home away (going too low) or having the home sit on the market too long (going too high). .
In conclusion the BPO real agent serves a vital position to the real estate community to both homeowners and banks/lenders by being the eyes and ears of the banks and lenders, they ultimately own these homes, so they can make intelligent unbiased decisions on how best to price their property to sell in the current market environment within a specific time frame.
So the next time you see someone sitting in front of your home or driving by and taking pictures, know they are doing it for your benefit if you're requesting a loan modification to lower your payment or interest rate, or if you are selling your home, a BPO real estate agent will be sent over to take pictures.
Ultimately the BPO real estate agent is working to help you accomplish a goal, which may be to lower your monthly mortgage payment and interest rate, or to help you get out from under a high payment mortgage or upside down loan, either way the BPO real estate agent is on your side and is there to help you, so please don't shoot the shooter.
Since I am a BPO real estate agent feel free to ask me for assistance. I can help you help with your mortgage payments and if think you may lose your home to foreclosure, please contact me to talk about how you can walk-away from your home without messing up your credit. I will be happy to go over the process of getting out from under your upside down house and eliminate your mortgage payment while protecting your credit report and credit history long term.
Call Frederic Din, Your Imperial Valley Housing Specialist at 1-619-241-4415 or contact me via email info at ivforeclosures.com
Are you looking for foreclosure, short sale and great property deals in Imperial County? Visit my website http://imperialvalleyreo.com for listings of homes for sale. Interested in a certain home, I can help you buy any home you see listed.
I am Your Imperial Valley Housing Specialist, DRE Lic #01274420
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