How to BPO

Katie,

I grew up in Akron, OH and know what it's like in that area finding comps.  The houses were all built around the economy of the time, typically reflecting how well Firestone, BF Goodrich, and Goodyear were doing at the time.  The housing for 40 miles in every direction was built to accommodate the  influx of living from around the nation as the rubber industry grew and these large behemoths pushed for appropriate housing to match the pay scale.  And if you get far enough north, say Bath or Brecksville, you're now talking about steel instead of rubber...but the same concept.

Reality is that NABOP or any other organization for that matter, can give you more instruction on what you already appear to know, possibly offer insight that you never had, or possibly emphasize what you already know.  But the best advice you can take is to continue to focus on your region, become an expert on the history, the neighborhoods, and the market then stick to your guns when there are value disputes. 

Use your instincts when pulling difficult comps and consider the idea that you may have to pull 2 sets of comps - one for the type/style of house, one for the region.  We've had to do that in Denver when an expressway was built right down the middle of a ranching area.  Things just don't have a rational rhyme or reason.   That's why you're the REO SPECIALIST...and that's why it's called a Broker Price OPINION.  

I hope that my 2 cents helps.

Daniel

I learned from Kim (founder of NABPO,and Kim Class) and it has helped me through my entire career as a BPO agent. By no means am I endorsing, or suggesting you guys to pay for information, I personally think it's enough here so stop being lazy (lol) do your research!!! You can never get enough information. Also, be careful when asking other agents in direct competition questions about BPO's and REO's. They will give you misleading and sometimes false information just because you asked. Some will even refer you to companies that don't pay!!!! Always remember this business is very competitive, especially with the market being the way it is, more and more agents are trying to tap into this side of the business. We need to start a more secretive society so that we can share more information, and not have to worry because we know it's private!!!!! Please, if anyone has any suggestions I'm all ears!!!!

Amen Tiffany.  It's a funny profession with two ends of the spectrum.  First you have people like Melissa Schnieders who gives quality information all the time, then you others who truly are deceitful to run people off in the wrong direction. 

Katie, I hear ya too.  I remember when I first got into REO how confused and frustrated I was at the answer I would receive when I'd ask "what's the standard protocol for _________?" and the answer would be something along the lines of "well, it's different for every bank, every asset management company, every portfolio manager, and..."  WHAT???!!!!  But alas, I came to grips finally with the dynamics of the job.  Not to mention to lack of standard protocols.

A good friend of mine with 20+ years of appraisal experience provided me some good, quality guidelines to work within when pulling comps.  I also used to go to him early on for guidance on the tricky subject properties that would stump me.  I have tried to streamline these bits of advice that added up over the years on my website, but it's nearly impossible to nail them all.  That's why I'm such a believer in blogging.  There's SO much good information out there covering so much great material.  And to be frank, your very frustrations are the same frustrations that fueled me to design my site.

Tiffany - As for a secretive society I would recommend building your own blog (say on Wordpress or Blogger) and make it set as private and only people you invite/allow can enter.  Check out mine and see how well they can turn out (and I'm no graphic designer or programmer).

I was curious why any of us would think this info is proprietary, secretive or special? I have been doing BPO's for longer than most of the guys on this BLOG have been in real estate. Katie your info is good, glad to see you share it but why are others suggesting we keep this to ourselves?

Paul,

I realize that some people can be trusted and that with your veteran status you most likely don't rely on others to help you with you already-developed business.  However, just like any other industry the next generation will move in to help the veterans to pass on the trade.  Unfortunately, this next generation is limited to resources. 

Let's be honest, real estate, particularly REO, isn't like so many other professions such as medicine, accounting, etc.  There is no bachelor's degree in REO.  There is no PhD in BPO's.  The youth who area doing their best to get into the business, knowing full well that this IS the best way to accumulate profitable business, have limited resources.  And when someone comes along and throws them a bone in the wrong direction, the limited time that they have to successfully launch their business is jeopardized.  

You bring up a great point about this business is not proprietary, secretive or special.  Your support for our education development at UniversalREO.com is unique and appreciated based on this statement.

Sincerely,

Daniel
 

great help

Where can I get some reference material?

UniversalREO.com has some great reference material for free and for members.  ActiveRain is a GREAT resource, and you can get some incredible news and media from DSNews.com.

Enjoy~
 

This was very useful... Best of luck and keep doing what you do.

Even though I do not have so much experience doing BPOs, I do know the market I work.  I believe that should count for something.

KNOW YOU'RE NUMBERS! I strongly believe that a small investment of time studying the MLS will do wonders for your quality. Learn absorption rates to more accurately depict the marketing time. Don't say it's 90 days if it's really 120. This will be crucial, especially in REO values. Banks pay us to know these things. Even with BPOs, we need to show value in our services. It will pay off, trust me! I have quadrupled my business in a new market in only a year by being diligent in my work

BPO's are like liver or lima beans,  you'll lean to like them and with that do them well. For the information being private, well if you have built a mouse trap and been catching mice for years your happy.  Now every agent out there is copying your trap and catching the same mice so you do not eat as well.  I have to agree with the keep it private thing.  the new guys will be gone as soon as the tide changes, and for those of us who are old enough remember doing BPO's with no web!  Key REO agents are crucial to the lenders, newbies should have to prove themselves and do it themselves.

E Jeffrey - It sounds to me like you are thinking that technology is going to disappear.  I'm considering the possibility that you must reconsider the future of real estate.  REO is not about BPO accuracy anymore, albeit it's critical, it's more about disposition and without technology you, nor any professional will not be able to keep up with the new tide.  

My suggestion is to consider the fact that technology will be the only way to keep up with the true statistics (over 80% of current buyers purchase a minimum of 50 miles outside of their primary residence and have made their decision from the internet before ever making a phone call - how are you listing your REO's?  MLS?  Does that reach these buyers?).  Without understanding your clients and customers you'll never be considered a leader.

Nothing personal, I just disagree with your comments whole-heartedly. By the way, nothing is a secret anymore.  Not to the agents, and definitely not to the consumer.  That is a disillusion.  

I'm not against the web and I think you misunderstand my comments.  First I spent 9 years running a private equity group purchasing distressed debt and RMBS from the FDIC/RTC and S&L's.  Doing everything by hand including due diligence was nuts, pdf makes life easy as does the mls.

My concern is that all of the new REO/BPO guys are here only to make a buck and do not have a true passion for the biz.  If there is a lack of passion, risk management (asset recovey) may be compromised.

Some agents simply do not care and lately I have seen alot of them.  Listing agents with their first REO scared to enter the property, that have not done the trashout etc.  Hot water heater leaking with mold growing up the walls.  But hey they'll get their fee.  Maybe the banks should make an REO agent post a bond.  Put up or shut up I say.

To add to my last post, some of my friends are still in the biz, at Citi, Chase, and Allied.  Two of them handling commericial REO, one a wholesale underwriter.  Their comments-  New agents with no experience have little place in REO.  It was put to me this way.  Would I (my bud at Citi) hire a person who was not formally credit trained, to handle OREO (no mispelling there)  either multifamily or retail property?  No way they probably do not even know how to figure the cap rate! So why in the residential world is there not a baseline of experience or minimum credentials?  In the end its all about ROI!

 

 

Jeffery, I just noticed your post. I wanted to let you know I agree with you. I am very passionate about the REO business. I treat my REO clients like any other client and do my best to protect their asset, while also getting them a fast sale price. I admit that I like the money, but I more concerned that my clients are satisfied with the job I have done. I understand your frustration and think your comments are valid.