Lesley Lambert asked a question on www.AgentGenius.com about BPO’s. I’m not a big fan of the potential liability that exists with doing them. Lesley asked for the commenter’s thoughts and here was my answer:
This is a great question. I suppose there are a few questions that I would ask myself if faced with doing them again
1. Will doing a BPO take away from my marketing time needed to keep the funnel full of serious consumers, that may have a far higher return than this BPO?
2. Does my E and O Insurance cover me for doing them?
3. If I were to take my projected income for the year, divided by 2050 (number of work hours in a year based on 40 hour weeks) would the number of hours it takes to do a BPO be profitable? Example: Let’s say that I get paid $75 to do a BPO and it takes 2 hours (travel time and PC time to submit). If I wish to make $100,000 a year, that means my time is worth roughly $49 an hour. Already I’m in the hole and I haven’t include the cost of technology to handle submissions, gas, vehicle use etc…
4. Am I adequately trained to perform the requirements of the BPO? Typically they ask for what repairs are necessary and if repaired what would be the return of value. I’ve taught lots of GRI, Pre-Licensing and about 40 other topics. I don’t remember one of those curriculum ever teaching that information – save Appraisal training.
5. Do I have a resource to substantiate my suggested values of the property?
6. What is my Broker’s policy?
7. What is State Law?
8. What recent case law exists in my state regarding agents doing BPO’s?
9. Will doing the BPO for the Loss Mitigation Officer potentially yield a contract to do REO listings? Will this relationship be profitable for more than just the cost of the BPO?
Lesley also posted this survey on AG. Help her out with your answer, you may be surprised to see what others said.