Incompetence, Fraud?, and Racist Comments

By
Real Estate Agent with Keller Williams

Incompetence

I have an REO listing. The BPO came in low compared to the last sale price. The seller - wisely - wanted to get a second opinion. Unfortunately the agent they picked to do it worked for a company 35 miles away. This property is in the oldest section of town, ranch on a typical small lot, and needs about $30K in repairs. This includes a roof, a kitchen, an a/c system, and many other things. The neighborhood has no conformity.

The BPO agent used comps an average of two miles away when there are plenty close by. He used homes on 1 and 2 acre lots, in a superior neighborhood of newer contemporary homes. The land value alone of these properties is higher than the as-is value of the subject.

My value is around 85K, his is close to 150K. The client priced it in between but it is WAY over market value.

The client will suffer additional losses due to extended marketing time in a declining market and due to holding costs.

I don't believe the agent did this on purpose.

Fraud?

I did a BPO on a 4/2 with tons of problems. A huge tree had fallen and punched a hole in the roof. The roof was shot already. There is mold, the ceiling is falling in, some of the ceiling in the living room is only 5' 9" high. A/C is shot, no trim in entire house, eves and exterior wood supports are rotten, etc. Lots of functional obsolescence in the layout.

My BPO came in at around 52K AS-IS. Another BPO was done by a competing REO broker - it came in at $140k ASS-IS. Considering this broker's experience, I cannot believe this was due to incompetence. By all appearances he did this to make it hard to sell, and to create doubt in my competence and honesty with the client.

I HAVE BEEN VINDICATED - the property languished on the market for 7 months. During that time it lost about 11% of its value. It sold last week for around $40K.

This supposed REO "expert" missed the mark by 250%.   I would say, adjusted for depreciation, I was pretty darn close. The increased marketing time cosst the seller over $10K in depreciation and holding costs.

Behavior like this makes us all look bad.

Racist Comments

Be careful about placing listings on some social web sites. I posted a listing on facebook and some idiot posted a comment on the page and said the property was priced low becasue of some demographics that I won't go into - but it was disgusting. The internet and apparently our industry is full of some unkind and selfish people. Doubt I will post properties there again - but you CAN delete comments.

 

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Location:
Florida Volusia County Daytona Beach
Groups:
REO
REO REALTORS
REO Brokers Network
Tags:
daytona beach reo property
bpo fraud
bpo incompetence

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Rainmaker
93,314
Tina Allen
Exit Realty Tri-County - Mount Dora, FL

You would think agents would remain pretty close in numbers...I don't understand, we have the same information at hand.  There should not be such huge gaps.  You are right...it makes us all look bad.

Mar 31, 2009 02:53 AM #1
Rainmaker
124,132
Connie Betz
Keller Williams Greater Omaha - Omaha, NE
Top Omaha Realtor - Omaha Homes for Sale

Phil, while I do go back and check the comments of my listings online, I hadn't even CONSIDERED someone writing inappropriate information on it!  What will they think of next?

Mar 31, 2009 02:54 AM #2
Rainer
36,547
Donald Wenner
Keller Williams Maplewood Mid-Town Direct - Florham Park, NJ

Phil,

Those are huge differences in $$ amounts.  Hard to believe that somebody could be that far off.

Question for you, in the top example you stated the house needed $30,000 in work including a roof, kitchen and A/C system among many other things.  My question is where can you get all that for $30,000?  Here in NJ are we that over priced?  Or there in FL are things really that much cheaper?

To give you an example, I just put a roof on my house and the price tag was half of your repair estimate.  I aslo put in a new A/C system 2 years ago and that was close to $8,000, so that leaves very little left for your kitchen work.

DW

Mar 31, 2009 03:05 AM #3
Rainer
42,882
Diane Donnelly
Keller Williams Flagship - Annapolis, MD
Anne Arundel County, MD Real Estate

Hi Phil.

Glad you pointed out some of this unscrupulous behavior.  I am primarily a listing agent and often compete against agents who come in significantly higher.  How do they justify the pricing and why would they ever want to start a relationship that out of whack? Holding overpriced listings is a very expensive job and is bad advertising for the listing agent who doesn't sell the home he has listed.

Thanks again!

Diane Donnelly Keller Williams Annapolis

 

Mar 31, 2009 02:20 PM #4
Rainmaker
54,801
Phil Hanner
Keller Williams - Daytona Beach, FL
Phil at http://www.findahomeinportorange.com/

DW - That is the cost for an investor. Many have their own crews or do the labor themselves. A retail buyer would have to pay much more.

Thanks

Phil

Apr 01, 2009 12:45 AM #5
Rainmaker
54,801
Phil Hanner
Keller Williams - Daytona Beach, FL
Phil at http://www.findahomeinportorange.com/

Diane,

The property was already our company's listing. He was sent out to give a second opinion on my BPO. He did this to inflate the list price to make it hard for us to sell and create doubt in the seller's mind about my abilities and ethics. He has contacted our sellers more than once.

Phil

Apr 01, 2009 12:47 AM #6
Rainer
38,078
Sue Paige
ERA Today Realty, Windham, ME 04062 - Windham, ME

I also question if the other agent did an internal bpo? Such a huge difference. Did you let the am know that the realtor they used for the second bpo was 35 miles away and really wasn't aware of the market trends in your area? Here in Maine we find so many variables. The hardest is when it's a waterfront or with a row and the style is way off the norm for that area. Also we have to deal with so many differences in the different lakes and ponds and their location, clarity, etc. If a bpo agent is hired who doesn't understand the differences it can hurt the outcome.

It just one more challenge for us to take on. I say bring them on

Apr 03, 2009 03:57 AM #7
Rainmaker
1,025,371
Rob Arnold
Sand Dollar Realty Group, Inc. - Altamonte Springs, FL
Metro Orlando Full Service - Investor Friendly & F

There is a lot of jealousy among agents doing BPOs and REOs.  Many people hate to see others doing all the business while they get little if any. 

No doubt that many BPOs are hard to comp.  I try to limit the ones I do to about 10 miles from my office.  Otherwise I might be unfamiliar with the area, plus I'm too lazy to drive that far.

Apr 06, 2009 09:21 AM #8
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Rainmaker
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Phil Hanner

Phil at http://www.findahomeinportorange.com/
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