Value, Exterior BPO versus Interior BPO:
Author: Best Selling Book, BPO & REO Simplified, "How to Work With Asset Managers"!
After receiving an exterior BPO assignment from an outsourcer, Jack completed his due diligence on the property. Jack drove to the property , upon his arrival, he documented that the property was a 2,500 square foot ranch (one level), new built construction, semi-custom house, beautiful exterior brick/stone work, situated on an acre, it had a hugh deck on the back of the house providing views from Pikes Peak to Longs Peak, (approximately 150 miles of mountain views).
The house exterior was in above average condition, it needed absolutely no repairs for an REO (Real Estate Owned) asset, and this was as close to a perfect property as Jack has experienced in his many years of performing BPOs.
During inspecting the exterior of the property, Jack noticed that the surrounding houses were in very good conditions.
Jack completed the exterior BPO; he valued the asset at 350K with no repairs needed.
After a period of two months, Jacks Brokerage was assigned by the Bank to complete an interior BPO.
Jack was very familiar with this property, Jack drove back to the property, he gained access as instructed by the bank and went through the front door, When entering the living room, he noticed a grand chandelier in the entrance way and very expensive ceiling fans in the family room. He continued his inspection into the large kitchen, he was totally surprised. The kitchen was completely striped. There was no tile flooring, all the cabinets were gone, the granite counters were missing, all the appliances were gone, and the light fixtures were gone. Nothing was left in the kitchen. It was like walking into a walk-in closet without walls; however, the studs were in place.
The others rooms including the dining room, family room, living room were untouched, they were beautifully decorated, gorgeous red wood floors, custom interior paint.
The house has five bedrooms and five baths, including two master bathrooms, Jack entered one bedroom at a time; his attention was directed to each bathroom. In each master bath the 5 piece bath set was gone. Again in all the bathrooms, the vanities, light fixtures, toilets, granite countertops, and floors, the shower and shower heads were missing. The Seller striped the kitchen an all five of the bathrooms. Jack finished the interior inspection, he took detail notes on what was missing and photographed all the damage, missing items, repairs needed etc.. Jack took approximately 60 pictures if the interior along with a new set of exterior photos. (The property condition may change from the exterior to the time the interior is being performed). Jack finished his BPO and went back to the office to complete his assignment two hours before the deadline. (If his BPO is due in 72 hours, by submitting it two hours early, it gives him time to correct it, if quality controls issues are a problem),
His Interior BPO was valued at 275K a big difference between from his original exterior BPO of 350K; this was calculated and adjusted because of the subject because of all the missing items and the change of the interior conditions.
NOTE: Please do not assume the exterior condition is exactly the same as condition of the interior of the subject. The value could be higher for an Interior BPO versus an exterior BPO or it could be the other way as well.
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