Perfect example why the Bank Owned values are way off (high and low)!

By
Real Estate Agent with Michigan Realty Solutions LLC

This was posted this morning on a large national investor and agent web site.

"I'm going to middleton Real Estate academy in September. I heard that
doing BPO's pays between 75 and 100 dollars per home. What do I have to
do to start doing BPO's do I need a real estate liscense? please help"

Now before you get to judgmental on my criticism, keep in mind in my state ONLY real estate BROKERS are allowed to do BPO's and from my experience (20+ years around REO) the banks are looking for "Brokers" with extensive experience in valuation of property to preform these BPO's.

Now let us examine the reality...

Most agents have 10 years or less experience in the business, most of those seem to be 5 years or less. They never been through a recession, they never worked with REO unless they sold one or two to a buyer client, and now they are starving with little to no deals on the table.

Starving Agent looks around the office and sees "Joe Smith" a seasoned agent doing REO and working 20 hours a day closing 20 to 40 deals a month and a staff of 5. The starving agents signs up for a couple valuation sites for bank owned homes and next thing you know they are doing 100 reports a month at an average of about 50.00, that's 5000 in extra income, less gas and mileage to go see all the properties.

But wait! "Joe" don't go see the properties....he pays a non-licensed assistant to go get photos, then another to pull comps and type reports. "Joe does 300 reports a month, pays 2 assistants and still makes 8000 a month in extra income without ever looking at a report. So why can't starving agent do the same?

Hell, these are just fill in the blank forms so the bank knows what to sell the property for right? If starving agent or these unlicensed assistants are off a little, no harm, someone will get a deal if the value is low or the property just has to sit a while to come down in price if the value is to high right?

What most of these agents, doing BPO's or allowing assistants to do them with little to no experience is...

These BPO's are often used to determine if a lender should foreclose or just walk away from a loan. Should the lender accept the much needed short sale offer on the property that an entire sellers family and credit is hanging by a thin thread upon. Even before the crash, many banks used BPO's to double check appraisal values before going forward to make a loan. There are many more reasons BPO's are ordered. Many of them with far reaching effects that starving agent or too busy REO agents never see the effects of poor quality BPO's.

Now granted, many agents/brokers do follow the law and do take thier job very seriously. Many REO agents/brokers doing BPO's have the experance to value a home from photos, pull thier own comps, have an assistant type the report , and then look it over before delivery to the client.

The unfortunate truth is more and more agents/brokers are cutting corners as the market gets tighter and the one being hurt in the end, all too often, is the consumer.

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Tags:
reo
bpo
foreclosure
bpos
short sales
evaluations

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Rainer
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Jay Goscinski

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