I first became involved in the Default Industry just after Thanksgiving 2006, in an effort to find a way to supplement my income from home, as I was becoming more homebound in caring for a sick wife suffering with cancer.

Much of what I learned was from Asset Managers who I think were learning about this industry right along with me.  Together we grew and adjusted to meet the needs of our common clients - whether they be Wall Street Investors looking to purchase a portfolio of loans or large loan servicers pricing REO listings for quick liquidation...and many other reasons in between.

The biggest challenge the Default Industry has with BPO's is there is a genuine lack of consistency in the market, as agents and brokers are all trained differently.  By becoming Five Star Certified, those providing their BPO reports can offer a much more consistent product and in return help stabilize the market and even our economy.

Today, I can document over 500 completed BPO's in my local area, which eventually led to me becoming a fairly successful REO Listing Agent - now having listed and sold close to 100 REO properties for a handful of Asset Managers.  I have also trained several agents who worked with me early on, who are now successfully listing and selling REO's on their own, in addition to my current team of Brokers that I have trained in the art of preparing good comprehensive BPO's.

In an effort to grow my business, I have enrolled in a series of classes provided by the Five Star Institute - undoubtedly one of the most prestigious organizations that service the Default Industry.  The last class they offered on line, "Providing Broker Price Opinions" was left to last for me; after all I have completed over 500 BPO's in the last 2 years.

I thought for sure I would breeze through the class.  I was hoping to pick up a pointer or two, but most important I wanted the credential to provide me the credibility that Certification brings to the table and allows me to market to the potential clients I hope to contact and privilege me with their REO listings.

Was I mistaken?

The course is very comprehensive and includes an enlightening foundation as to what BPO's are actually used for and who uses them.  There is some excellent material on the differences between price and the various types of value.

I found the worksheets they provided to be very useful.  In my own business, I have created several proprietary Excel Spreadsheets to help in analyzing the nuances between comps and the subject property.  What is shared is somewhat simpler than my creations; however had I had these in the beginning I would not have had to take the time to figure out what I did - I would have just done it.  These forms alone are worth the price of the course if it save the serious BPO provider hours of time and calculations.  After all, isn't time our most important commodity?

I am going to have to check with the Asset Managers that I work with - because there is a very good chance that I have been providing inaccurate information in every BPO I have ever done and this has to do with the ROOM COUNT.  Instinctually I have always added the number of bedrooms to the number of baths and added two for the kitchen and living room; so a typical 3+2 would automatically start out as 7 rooms when it should only be 5.  I would then search the available data on the comps for additional rooms such as a Family Room, Den, etc. and add those to the room count.  Well, Five Star tells me we don't include the bathroom count any more than we would include a laundry room (I never did that!).

There were numerous other in-depth discussions about every conceivable element of a BPO and showing the difference between a good one and a bad one.  Again, most of this I thought I already knew and took what I knew for granted.  However; I must share that I had at least on "Ah-Ha" moment when every single topic was discussed.

I know I now must verify my findings with those that I currently do work for so that I am consistent in my finished product - seeking their opinions n what they want from me and then I must go back and retrain those in my team to do it the Five Star Institute way - which should become an industry standard.

I strongly recommend that anyone who wants to get ahead in this niche take the time and spend the few dollars necessary to invest in their formal industry education.  Although I can't guarantee that you'll get more business as a result of taking the class and becoming certified, what I can guarantee is that you will have a much clearer view of the industry and your very significant role in it.

Happy Thanksgiving,

John Occhi, REO REALTOR®
Allison James Estates and Homes
(951) 927-9473