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Wonder How They Arrive at Those Crazy BPO Prices?

By
Real Estate Agent with Morris Williams Realty

Yes, there was a time when I was interested in doing BPOs', there was a process to be learned, a goal to be reached.

It was never about the money, I wanted to say that I was part of the process, that I had some input on the lender side of the Foreclosure Machinery.

I wanted t gain a greater knowlege of the appraisal process, I wanted to delve into an interspective train of thought that would require my knowlege of the area. WIth this in mind. I studied the MLS data, I studied Data Collection from other sources. I looked at Zillow, Bank Of America, and other evaluation sites.

If these sites have that much knowlege, why do the BPO companies utilize people to do this job. If you ever do the job, you will know. Homes in foreclosure tend to deteriate, and even experience vandalism. I did a report on one home that had a terrible experience 2 weeks before auction. Every wall in the home had been attacked with a tire iron and a hammer in an attack that must have taken an hour to complete.

What kind of anger is attatched to a house that makes the former owner go off like that. The home had been stripped as well, and what was left was terribly vandalized. I of course took pictures of the damage, and attempted to estimate the damage.

Doing BPO's was an interesting phase in my Real Estate Career.Thank God I did not do it for the money, The payment schedule varied by company, the worst was Evaluation Solutions. I got a check in this week for two "Emergency" BPOs' that I did in FEB, 2008. I know many Realtors are using BPOs' as a way to keep up thier local knowlege of their area, and to keep some gas money coming in. I believe that doing the BPOs' do assist in honing a necessary area of our Real Estate skills.  I took my appraising duties very seriously, I realized that what was being done would actually affect peoples lives in a small way.

Plus, I used to see the the numbers produced by others and wondered what kind of criteria was used to make these determinations. Now I know.  But waiting to get paid several months is not worth my time, I have learned enough to say that I have the experience.

Funny how something I really wanted to do for a while suddenly has no further interest to me..I now know how those BPO numbers are arrived at..by hiring crazy folks like me....NUff Said!!

Comments (21)

Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

Mike - figuring out what the value is has never been so difficult -- there are so many variables -- Many agents will not divluge the concessions - so one must rely on a clause in the contract stating that the appraised value will be equal to or great than the contract price !

May 18, 2008 03:01 PM
Cindy Jones
Integrity Real Estate Group - Woodbridge, VA
Pentagon, Fort Belvoir & Quantico Real Estate News

I haven't ever waited for more than 2 weeks to be paid for a BPO.  Guess it depends on the company.  What I have found interesting is even though they give us a 48 hour turnaround it can take weeks for the servicers to get the information back to the lenders.  I've been waiting for a BPO to arrive at Indymac on one of my listings now for 3 weeks.  We could have sent it by carrier pigeon and had it to them faster!

May 18, 2008 03:01 PM
Jennifer Butz
Not yet determined - Lilburn, GA

Interesting, it's no wonder why the market is crying that NUMBERS are dropping, house values are ridiculous, we're all gonna die if we ain't careful. Talk about a freeway to fraud too for some people! How crazy! Thanks for sharing!

May 18, 2008 03:03 PM
Kristal Reid
Coldwell Banker Bullard Realty - Zebulon, GA
Zebulon, GA

LOL, Mike.  I've pretty much given up doing BPO's too.  And like you,  in my opinion, Evaluation Solutions was the WORST!!!  I FIRED them about 2 months ago, over a CRAZY BPO they wanted me to do, but they didn't want to give me enough info to get started, but they needed it by noon  the next day.  The girl did email me back wanting to know why I no longer wanted to work for them.  I told her if she really wanted to know, have her supervisor give me a call.  Do you think I've heard from her yet?  NOPE!  I'm also STILL waiting for a check from a BPO that I completed for them in February of 2007 (yes, 2007.  That's NOT a typo!)

May 18, 2008 03:07 PM
Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

Mike, I think how a BPO is determined is similar to how the Active Rain Gods annoint someone with a feature post. Who knows how it happens?

May 18, 2008 03:15 PM
Susan Walters
Keller Williams Realty, Ann Arbor, MI - Ann Arbor, MI

I guess I was lucky - I was doing BPOs directly for a lender and was paid almost immediately, plus listed the property if they decided not to auction it.  I'd do them still for that lender except for a change in personnel that included a licensed realtor.  My best deal ever was a BPO that became a listing and converted to about 12 closed deals after the fact.  Biggest problem with BPO's? Sometimes you cannot get inside and people can live very differently than the public face the neighborhood sees!  BPO's can be WAY OFF as a result.  Condition is everything.

May 18, 2008 03:27 PM
Mike Norvell Sr
Morris Williams Realty - Leesburg, FL
Norvell Consulting Group

Bo..I did several for a company that did pay well, and were actually good to deal with. But suddenly they quit calling, I checked with them and there was a different structure now..Too bad  ...but it was nice while it lasted..kinda fun and quick cash..not bad!!

May 18, 2008 03:55 PM
Mike Norvell Sr
Morris Williams Realty - Leesburg, FL
Norvell Consulting Group

Joan.. I love that..price will be more or less..it just gets better and better...C ya

May 18, 2008 03:58 PM
Mike Norvell Sr
Morris Williams Realty - Leesburg, FL
Norvell Consulting Group

Cindy,   Like any thing else, there are many companies that are better than others...I did recieve a few emails overnight that did not wish to use their name, but agreed that Evaluation Solutions was very difficult to get paid from....I do like the carrier pigeon deal...What got me is that the checks were cut just a few hours away..I could have driven there...funny, when they called to have me do more BPOs', the operator seem surprised that I was not willing to work now and get paid months later...............

May 18, 2008 11:03 PM
Mike Norvell Sr
Morris Williams Realty - Leesburg, FL
Norvell Consulting Group

Jennifer...I agree...the industry is going thru changes...some good..some not so good...Thanks for stopping by

May 18, 2008 11:07 PM
Mike Norvell Sr
Morris Williams Realty - Leesburg, FL
Norvell Consulting Group

Kristal....I hope that a few of the Owners of Evaluations get some feedback from this post...If all the agents just quit until thier payment systems got more realisitic....THey have an awesome website, great customer service for phone ins, and then you just don't get paid...I did learn a lot in doing some of their BPOs', and felt that thier crtiteria would lead to very competitive & accurate  pricing...

Wake up Eval Solutions..you can't call for Emergency Work and then not pay in the same speed you require the reports!!!

 

May 18, 2008 11:14 PM
Eric Kodner
Wayzata Lakes Realty: Eric Kodner Sells Twin Cities Homes - Minnetonka, MN
Wayzata Lakes Realty: Twin Cities, Madeline Island

I'm gladly leaving the BPO work to my competitors in my area.  My time is worth much more than what is paid for a BPO.

May 18, 2008 11:21 PM
Mike Norvell Sr
Morris Williams Realty - Leesburg, FL
Norvell Consulting Group

Gary...I got invlved because I did not know how these prices were arrived at...I must say, the criteria set by the companies in researching comps is extensive...WHile writing this post, I realized I have never shecked back on the actual homes I did BPOs' on t see where the pricing ended up...Thats just crazy, huh

May 18, 2008 11:40 PM
Mike Norvell Sr
Morris Williams Realty - Leesburg, FL
Norvell Consulting Group

Susan...I agree that doing Drive By BPOs' are a far cry from getting inside and taking a good look. I had one company that went to fifty bucks for drive bys because they said you didn't even have to get out of your car..Well, why don't you just do a Zillow search then if you don't want some semblance of accuratecy!!! I did a pile of them, never got a listing out of them, but did not ask for any either..by that time, Ihad plenty of listing that were in foreclosure....didnt see the need for any more ..Wasn't why I was in the foreclosure business anyway, but that post has already been written..

May 19, 2008 12:13 AM
Mike Norvell Sr
Morris Williams Realty - Leesburg, FL
Norvell Consulting Group

Eric...I am of the same mood anymore...I try to do a good job, and be thorough...and with gas prices, I am not sure I am doing more than breaking even...maybe if I was retired or doing Real Estate part time...I cannot believe that the companies are having agents do this work for 50-75 bucks...it has to have a higher value than that

May 19, 2008 02:05 AM
Susan Walters
Keller Williams Realty, Ann Arbor, MI - Ann Arbor, MI

Mike, Love your correlation between BPOs and Zillow - just about as accurate!

May 20, 2008 04:46 PM
Virginia Hepp - Mesquite NV REALTOR
Desert Gold Realty - Mesquite NV Homes For Sale - Mesquite, NV
Mesquite NV Homes and Neighborhoods - Search MLS

Mike - I did a few drive by BPOs, just for the experience of it, but I felt that I was just giving an educated guess as to what the property might be worth IF the interior was in fair condition - you know, maybe some plumbing left and a sink or two. :)  I have a friend who does tons of them and gets tons of listings...just not my thing.

May 20, 2008 08:02 PM
Mike Norvell Sr
Morris Williams Realty - Leesburg, FL
Norvell Consulting Group

Virgina, thanks for stopping by, I see you hit that submit button a few tmes....C ya

May 21, 2008 05:05 AM
Virginia Hepp - Mesquite NV REALTOR
Desert Gold Realty - Mesquite NV Homes For Sale - Mesquite, NV
Mesquite NV Homes and Neighborhoods - Search MLS

Mike - No, I minimized while waiting.  For some reason, your post took a very long time to load, again today.  I will delete the extras and check back to make sure this comment doesn't repeat.  Thanks.

May 21, 2008 05:15 AM
Mike Norvell Sr
Morris Williams Realty - Leesburg, FL
Norvell Consulting Group

No prob Virginia, It happens to all of us here when AR is Sneezing

May 21, 2008 05:20 AM