Steady stream of inflated BPOs- REO agents using them as loss leaders for listings

I have had a constant stream of BPOs that are not only inflated but just plain ridiculous.  They are so far out of line that my negotiators are telling me they cant even counter..... I have had a conversation with one of these BPO agents and they came right out and told me they only do them to get the potential listing once the property is REO. She did not say she inflated to influence the outcome however....  I am formulating a plan to pro-actively counter this issue and I am open to ANY and ALL suggestions.  The negotiators I talked with dont want to address this issue because it is not in their interest to confront this "practice."   Wells and BOA at least give an opportunity to dispute.  BTW, I have been a member here for only 10 days and have found this site to be invaluable!! 

Views: 762

Reply to This

Replies to This Discussion

I too am experiencing over-priced BPO's, but I had not connected it to the BPO Agent wanting the Listing until now.  Now, the one I have in Palm Desert is making more sense.  The BPO Agent is an REO Agent in the area and he was $100,000 over-priced!  He wanted the Listing!  The Lender sent out their own Appraiser a couple weeks ago.  I still do not have a contract and we are now $100,000+ below his original BPO!  Chase would not even counter our offer from 6 months ago at $150,000.  I have now reduced the condo to $125,000 and still do not have an offer.  Will let it sit for one more week, then reduce again.  What a crappy thing to do on the part of my fellow Realtor!
I'm going to blast this out in the newsletter today., Lets' see what our members have to say
I too am seeing overpriced BPOs.  I have had 4 in the last few months and could not get the banks in each of these cases to come down off the BPOs even with comps, pictures, pictures of repairs needed, etc.  I was told by 2 banks that if I could get the appraisals on at least 1 of the comp sales I was sending them that they would reconsider their pricing; however, without an appraisal to support a lower value than what their BPO agent gave them, they were not inclined to reduce the value down.  Needless to say, in most of these cases the buyer would not amend their offer to the BPO price, and any backup offers were not going to work, the buyers walked and the houses ended up getting foreclosed on.  I am wondering if I hire in an appraiser to do an appraisal would work.  Of course, that is money out of my pocket and no guarantee of what the appraiser will come up with, but I have considered doing it, in light of the fact that I am also running into this problem.
I was told by one BPO agent for a property in the Bronx that FNMA sent the BPO order back to him until
they had what they wanted in price. I also had another BPO agent say that now he's seeing investors not
excepting and short sales or REOs as comparables. That is why its a must that we go to all our BPOs.

David,  I could not agree more.  It is a MUST to go and meet the BPO agent with comps in hand.  I do

a full CMA now and hand it to them.  It may be to help them (which I have no problem doing) but its certainly letting them know that I have done my homework and they will be challenged and be held accountable for what they turn in.  Those agents who dont to this literally roll loaded dice. 

Hi Rob,

 

I had this problem with one agent in particular and lost 20 deals because of his inflated BPOs until I put a stop to it (I know, I'm a slow learner).  Here's what I did.  I started tracking the agent, their BPO amount, and the amount the house actually sold for (either on MLS or at Sheriff Auction).  I also started paying another agent I trusted to do a BPO "At the Same Time" of the other BPO to let the high agent know I was going to benchmark his BPO against another.  After I had some "proof", I asked the high BPO agent when he called to do another BPO why his BPO came in at $XXX,XXX and the other agent's came in at $YYY,YYY and also why the previous 3 he did came in at one price and actually sold for considerably less.  I e-mailed him the proof and told him I can not and will not allow him to do my BPOs anymore.  When the bank calls to say "Why are you not letting this agent in?" I provide them the same proof and tell them to pick any other agent but not this one.  By the way, this agent is the biggest REO agent in the area.  Hmmmm, conflict of interest anyone?  Of course this guy goes way high so the short sale fails and he stands a better chance of getting the REO listing.  Not anymore with me.  I'm done with this guy.  He's cost me and the banks hundreds of thousands of dollars and has prevented homeowners from selling their homes at fair market value allowing a foreclosure to post to their record forever.

I always meet appraisers and BPO agents at the listing with a CMA, summary report, and repair list/bid (if applicable) so I can provide factual information to help them make an informed decision.  The summary report provides info on the offer price if I have it and any circumstances relevant to the property such as anything unpermitted, major repair concerns, location conditions that affect value, etc...  If the house is trashed, I will either provide an itemized list of repairs with estimated cost on the summary report or maybe even have a contractor friend write up a bid.  I also ensure they understand within their realm of subjectivity in price, the lower the better for the short sale valuation.  I get positive response 99% from agents and appraisers and appreciate the helpful information I've provided to make their job easier. 

Dan,

 

You were reading my mind.  I was starting to formulate how I would go about it and now you have given me the last peices to the puzzle.  I have one REO agent here in Atlanta that does the same thing to me.  If I chose the "glorious path of least resistance," to not build a case against her, I will get what I deserve. You would think the banks could simply stop this deceptive practice by barring agents who do their BPO (and their companies) from getting REO listings.  Its just a blatant conflict and what in the world do they expect when they give them keys to the henhouse?

 

Thanks for the insights.  Again, this forum is incredible

Dan Malone said:

Hi Rob,

 

I had this problem with one agent in particular and lost 20 deals because of his inflated BPOs until I put a stop to it (I know, I'm a slow learner).  Here's what I did.  I started tracking the agent, their BPO amount, and the amount the house actually sold for (either on MLS or at Sheriff Auction).  I also started paying another agent I trusted to do a BPO "At the Same Time" of the other BPO to let the high agent know I was going to benchmark his BPO against another.  After I had some "proof", I asked the high BPO agent when he called to do another BPO why his BPO came in at $XXX,XXX and the other agent's came in at $YYY,YYY and also why the previous 3 he did came in at one price and actually sold for considerably less.  I e-mailed him the proof and told him I can not and will not allow him to do my BPOs anymore.  When the bank calls to say "Why are you not letting this agent in?" I provide them the same proof and tell them to pick any other agent but not this one.  By the way, this agent is the biggest REO agent in the area.  Hmmmm, conflict of interest anyone?  Of course this guy goes way high so the short sale fails and he stands a better chance of getting the REO listing.  Not anymore with me.  I'm done with this guy.  He's cost me and the banks hundreds of thousands of dollars and has prevented homeowners from selling their homes at fair market value allowing a foreclosure to post to their record forever.

I agree to go.  Our company received received communication through management, that we as agents are not allowed to provide comps to the BPO agents, stating that what ever information we give them, they can't use.  I too have had several BPOs come in too high, that I wonder what the BPO agent was smoking.  Seeing the same thing as I have lost the fight and low and behold the BPO agent gets the listing  and lists it too high-stating that it's the number the bank picked.  I had on in WI that the bank purchased the house back at the sheriff sale for $209,??? and the listing comes back on the market for $275,000...



Rob Carrino said:

David,  I could not agree more.  It is a MUST to go and meet the BPO agent with comps in hand.  I do

a full CMA now and hand it to them.  It may be to help them (which I have no problem doing) but its certainly letting them know that I have done my homework and they will be challenged and be held accountable for what they turn in.  Those agents who dont to this literally roll loaded dice. 

I have run into this situation as well to great frustration. The agents that the lenders are sending out to do my short sale BPO's are almost exclusively REO agents who generate unusually high values even after I have provided clear comparable sales data. Challenging the BPO doesn't typically help and the short sale gets denied due to the BPO. And then, surprise! The REO agent wins the listing post foreclosure and lists it below the price I had it under contract for. For all the regulation we have, this is one scam that has slipped below the radar.
I've spoken with BPO agents who say some banks specify that they use "normal" sales and no foreclosure or short sales as comparable sales so it may not always be the BPO agent positioning themselves for the listing.  Must be challenging to even find those comps!
Jackie,  I would love to see the management rule in writing that says you can not provide comps, I have done thousands of BPOS over the years for alot of different companies and have not seen one company that says we can not use agents comps.  With all due respect, someone in management at your company is not very well educated in BPOs.

Jackie Kumm said:

I agree to go.  Our company received received communication through management, that we as agents are not allowed to provide comps to the BPO agents, stating that what ever information we give them, they can't use.  I too have had several BPOs come in too high, that I wonder what the BPO agent was smoking.  Seeing the same thing as I have lost the fight and low and behold the BPO agent gets the listing  and lists it too high-stating that it's the number the bank picked.  I had on in WI that the bank purchased the house back at the sheriff sale for $209,??? and the listing comes back on the market for $275,000...



Rob Carrino said:

David,  I could not agree more.  It is a MUST to go and meet the BPO agent with comps in hand.  I do

a full CMA now and hand it to them.  It may be to help them (which I have no problem doing) but its certainly letting them know that I have done my homework and they will be challenged and be held accountable for what they turn in.  Those agents who dont to this literally roll loaded dice. 

RSS

Members

© 2024   Created by Brett Goldsmith.   Powered by

Badges  |  Report an Issue  |  Terms of Service

********************************** like buttons ************************