REO - Start With a Simple BPO and the Basic Tools of the Trade

REO - Start With a Simple BPO and the Basic Tools of the Trade

This series of articles is based on my personal experience as a Hemet REALTOR® who now specializes in listing and selling REO property for banks and Asset Managers throughout South West Riverside County and The Pass Area of The Inland Empire area in Southern California. I know there are numerous paths to REO success – as in anything in life.  Perhaps my path was the hard way, I don’t know, but it worked for me.

What I am talking about today is performing BPO’s for various lenders and asset managers.  As I disclosed in a recent article, I started performing BPO’s back in late 2006, getting paid $50 a whack for them.  In those days it was taking me close to two hours computer time in addition to the time I spent driving back and forth taking pictures.  It was not a very ‘good job’ at less than $20 an hour but it did pave the way for my successful entrance into the world of REO real estate (plus it continues to make my $540 car payment every month – and my wife likes that).

What is a BPO?

For those who do not fully understand the term BPO – it stands for BROKER PRICE OPINION.  The data collected for the report is very similar to a CMA that you would perform for a residential listing client without a lot of fluff – but probably much more detail oriented than a CMA that you totally control.

Every company that wants BPO’s will have their own online form for you to complete and a place for you to upload digital photographs of the subject property.  I guess there may still be a few companies that are not as streamlined as others, but all that I have worked with are online.  Every company has their own twist on the form, so where the data is fairly consistent it is never the same in every case.

One more important comment about BPO’s and what command they give you of your market.  I can guarantee you that if you start performing a BPO a day (on average) you will have become one of the most impressive agents in your area with the current knowledge of your local market – you will not only amaze your clients and colleagues…you will amaze yourself at what you never knew before.  And to think you are getting paid to learn this valuable information.

Pictures

The same goes with the pictures – every lender is different.  Of course, every client wants a picture of the front of the subject.  Most will want a street scene and most will want an address verification picture (but not all).  Some want a street scene in all directions; some will want a picture of what the property faces and/or any view; others will want to see each side of a property.  The point is, know what your client wants and deliver that (on time).  I now make it my rule to take a full set of pictures, meeting all of the needs of everyone of my clients.  Last thing I want to do is get up at 5:00 a.m. and race across town to get a picture of a street, because I only took it in one direction and the report is due at 6:00. (Been there and done that, thank you very much.)

One more about pictures…and this is very important.  Again, it has to do with each client.  I have one client that will allow me to NOT post a Comp photo if it is not in the MLS – and another client that expects me to drive by and take comp photos if they are not available elsewhere.  Because of this, I TRY to get my research done prior to visiting the property, so if I need additional pictures I can find them and take them the first time.

There are numerous resources for BPO companies and REO companies.  As I mentioned in an earlier article, I will not be revealing my specific resources in this series of articles.  I got my initial experience from a company that promised me they would NEVER assign an REO listing to me – but they were patient with me and helped mold my reports into the professional documents their clients demanded.

Develop Your Own System

To be honest, I think it was the best entry into this business.  I have seen mega-agents network their way into the REO business only to find out afterwards just how difficult a business model selling REO listings actually is.  It is not for the faint at heart or agents who do not want to get their hands dirty.  Selling REO listings is a lot of work that does not pay particularly well on a case by case basis.  The entire secret is volume.  Develop and have activities and systems that can easily be duplicated.

Tools of the Trade

BPO’s is one of those systems that you are just going to have to figure out on your own.  Each MLS is as different as each clients needs.

There are several tools that have made my life a whole lot easier.  First and foremost, of course we need a digital camera.  I guess it goes without saying, but if it doesn’t get said, then we will hear down the road, “no one told me I needed a digital camera”; and I hate to hear people complain.

Next, I got a GPS last year on Black Friday (the day after Thanksgiving) for sale at WalMart for something ridiculous like $129.  How could I have lived without one for so long, I’ll never know?  Of course GPS is not perfect.  If you are in an area like I am in Hemet, CA where a lot of new homes have been built in the last several years it is hit and miss for stuff built in the last 2 years. 

What I have today is adequate and I’ll keep it for a while, but I’ve got to tell you there are some really sweet systems out there that I have been eyeballing.  Besides, wouldn’t my used system be a good tool for an assistant or handyman that needs to go find a property for the first time.  I program every one of my listings into the memory, so it makes it kind of cool to check out numerous properties, when I am in an area of town I am not usually in.

Perhaps my favorite tool is my 22” flat screen monitor.  It takes up a lot less room on my desk and really does a great job streamlining the process as I can now have a full page view of my BPO form online as well as the MLS or other website that I need to gather data for my report.  I just love my big 22”.  Whoever said bigger is better knew what they were talking about! Heck someday, I may even figure out how to play with the built in video camera and broadcast a video report for my blog.

Back to the Beginning

I side-tracked myself; I wanted to let you know what you need to successfully complete an application with a company to have BPO’s and REO’s assigned to you.  Like everything else in this industry, there are no hard rules because the rules change with each company that offers business.  If we can call it ‘standard’ information, than I guess this is the list of what it takes: 

• Have a PDF Copy of your State Real Estate License
• Have a PDF Copy of your Office/Brokers Real Estate License
• Have a PDF copy of your Error and Omissions Insurance Policy
• Have a PDF Copy of a W9 Form – so the Accounting Department can get you set up and pay you
• The name of your MLS – if you belong to more than one MLS this will be good
• Complete a list of the cities and zip codes you want to work-in.  You should have one list that is just zip codes, another that is just cities and a third that is both – again each company wants this info in a different format.  I keep a copy in a spreadsheet and then cut and paste into NOTEPAD.  You also want to make a copy of each list in a column format as well as separated by commas – any ideas why? (This hint right here will save you hours if you get a hold of a large list and start applying all over the internet.)

Many times the application will just ask you for the information – other times they want a copy of the documents – so have it ready.

As far as applying to various sites, I would strongly suggest you work in moderation.  Find a handful of companies to apply with and then apply for areas that you are comfortable traveling to on a moment’s notice – after all there will be rush orders that will pay a premium.  If you got greedy and put in every zip code in a 50 mile radius or more, and turn down calls…well just believe me it will not do anything positive for your reputation.  Often times you only have one shot to make it right – so be true to yourself.  Once you are in a position to grow, then grow with your own tested systems in place.  Take baby steps today to run a marathon tomorrow – just do it right or don’t do it at all.

I think I covered more than I planned here.  So digest what I have shared.  In my next article, I’ll go ahead and share what is involved when you get your first REO assignment – just don’t pop the champagne cork yet though.

Blessings to all who read, 

John Occhi, REALTOR®
The REO Team at Mission Grove Realty, Inc.
www.RepoAndForeclosure.Com
(888) 540-7243

Servicing THE REO Needs of Asset Managers, Banks and Lending Institutions in the Hemet - San Jacinto Valley, Temecula, Murrieta, Winchester, Wildomar, Menifee, Sun Valley, Perris, Moreno Valley, Romoland, Homeland, Nuevo, Banning, Beaumont, Cherry Valley, Yucaipa, Redlands, Mentone, Loma Linda and throughout South West Riverside County and The Pass Areas of The Inland Empire in Southern California.  If you are a buyer, investor, first time home buyer or are just interested in REO real estate, please contact us at the above website or phone number.