I am writing the post as a result to some questions posted by another fellow agent in Scottsdale.
He wrote something along these lines : banks sell homes sometimes at values so low that are "downright stupid" and he was wondering if some of the agents that do the BPO's might just not know the area well enough to perform a proper BPO/
Well if you are an agent from Glendale and you have only worked in Glendale for the past 2 years of your entire RE career than you should not attempt to do a BPO in North Scottsdale ! Period. If you never ever sold a home in Scottsdale do not do a BPO in Scottsdale . I for one worked all over the Valley in the past as I did represent a lot of investors from out of state .. .yes, kill me now ! lol. I know what was overpriced then and I know what should still hold values now . I also own properties in every corner of the valley so I just happen to know more than the average agent the has a specific area they specialize in. I wish I can buy some more right now as I see some values that are just that: "downright stupid " but banks do not like to see loan applications from self employed real estate agents .... LOL
So here is the truth behind the BPO's :
I do some of those and did have a few in Scottsdale but I know the area well; maybe better than anything else even tought I don't have my office in Scottsdale any more. I started my career in Scottsdale back in 2002 and did a lot of Open Houses for my company as a rookie so I learned everything from DC Ranch to McCormick Ranch ; however that is not the problem .. when you do a BPO sometimes the vendor ( that is the 3rd party to the transaction and gets the orders from the bank) has certain rules and instructions and they want to see REO's sold and active as comps used in the report. I had to go back and change computations or give extra explanations and had to bring the values down a bit and spend more time to find something that I did not think was 100% appropriate.
Sometimes you have to do a "drive by" BPO and so you don't know if the property is in good shape or not inside or it it has 100K work of upgrades. I always. always suggest that an inside BPO be performed . Most pay a very low fee no matter where is located ; from 50 for a drive by to 75 for an inside if completed in less that 48 hours. So banks stand to loose or gain thousands of $$$$ but pay 50 to get a BPO. ( this is the same thinking that got them in trouble in the first place, yes I said it . ) I think this all should be de centalized and every bank to have a local branch where values determined; not at their headquarters located who knows where ....
I recently got into an argument with one of the reps ( at the expense of not getting more work , hopefully not ) about a property in Ahwatukee Foothills because there were no REO's as comps for this type of home within 2 miles around; this was a custom built , with a large lot backing the preserve. Worth close to $ 900 K + and they wanted me to bring it closer to the 600 K tract homes where there are REO's . So I had an issue with that and wrote them a "nice letter" about the fact that I will not de value the market in the neighborhood knowingly . I told them to suggest the bank to do an inside BPO before deciding on a final price and hire an agent that will market this house properly not just stick it on the MLS at 400 K less than what is worth.
I actually got involved with the BPO's because I was getting upset and frustrated with the values that were projecting in my neighborhoods and wanted to hopefully make a difference.
I can say that I have always done a fair BPO and on the higher side for suggested listing price and then give a lower value for the possible lowest value if sold in 30 days or less . I have recently noticed one of my BPO's went on the market for 5K less that I suggested as the lowest possible value so go figure !!!!
Some agents have a factory for BPO's and probably have assistants that do these !!!! and so now you know !!!! there is no way you can do more that 4 ot 5 a day but some do 20 to 30 or more . Folks it is just not possible to do that many and do them well .... I always do them myself , from driving, to pics to comps to the information input. Once a listing sells very, very low in a particular neighborhood it will pull all values down no matter what, buyers will always look at that value and want their for even lower .
Please write back your comments and your experiences in this matter !
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