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

Posted by Robert A. Carrino on July 4, 2011 at 5:44am in Short Sale Discussions
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!! 

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Replies

  • Jeff Payne July 14, 2011 at 1:46am
    Suzanne, There are alot of full time BPO agents.  The problem is that they really do not understand real estate, they dont understand the market and they really do not know anything about values other than the information that is available to them in MLS. This type of BPO agent is killing the market and in my opinion it is very unfair because they essentially work for the lender and are not really a third party or even an uninterested party.   They will taylor the BPO to fit the wants and needs of the bank.  
    How in the heck can someone who does not sell real estate, probably never sold real estate, really understand what the market is?  The only way they can is if we educate them on market data, DOM, price history, showing history etc.

    Suzanne Kensington said:

    Rob, I have too faced this issue many times.  I spoke to one BPO agent who doesn't sell or list real estate all he does is BPOs.  He said that in order to become a preferred BPO agent he has to follow the guidelines they want and make the adjustments according to their guidelines.  These guidelines are put together by someone who doesn't understand real estate.

     

    I just had a BPO on a Chase short sale where the BPO came in $110,000 HIGHER than my list price.  They compared homes in the subdivision that are on golf course lots with valley views, pools and completely remodeled to my listing that stares at a block wall, has no pool or yard and is in original condition.  Chase refuses to allow me to dispute the value and they just cancelled the file.  I have opened a file with the Executive Resolution Office.  We will see.

  • Mary Wilcox July 14, 2011 at 1:38am

    Exactly Duane!  So, how can we get this out to the banks in bulk, if you will, to expose the, not only, unethical behavior, but show the banks this is actually losing the bank hundreds of thousands of dollars. (in maintenance & foreclosure costs AND longevity on the market.) Not to mention, the overall deterioration of our neighborhoods while these low-lifes play the game to line their pockets.  Grrrr!

    It irritates me to no end!

  • Suzanne Kensington July 12, 2011 at 10:03am

    Rob, I have too faced this issue many times.  I spoke to one BPO agent who doesn't sell or list real estate all he does is BPOs.  He said that in order to become a preferred BPO agent he has to follow the guidelines they want and make the adjustments according to their guidelines.  These guidelines are put together by someone who doesn't understand real estate.

     

    I just had a BPO on a Chase short sale where the BPO came in $110,000 HIGHER than my list price.  They compared homes in the subdivision that are on golf course lots with valley views, pools and completely remodeled to my listing that stares at a block wall, has no pool or yard and is in original condition.  Chase refuses to allow me to dispute the value and they just cancelled the file.  I have opened a file with the Executive Resolution Office.  We will see.

  • Gail Oleaga July 12, 2011 at 2:05am

    Good morning Rob,

    I am in Arizona and this has been happening to me alot. I was told by one Bank that the BPO was averaged??? Our  MLS software is designed to make recommendations to Agents on what the Sales Prices should be based strictly on averaging prices without considering the size of amenities. These prices are inflated because they are averaging a price of a home that is 1200 sf with a home that might be 2000 sf. I am thinking that the Realtors might be using this feature because its easy and convenient causing the prices to be inflated, sometimes by $20,000! I have been filing a BPO dispute, submitting my comps and asking them to review it. the first one I did was inflated by $30,000 and I got them to reduce it by that amount. I have been a member for hmmm lost count haha and I still find it awesome!

    Ask the Negotiator in writing this question . . . If the Buyers appraisal is less than the BPO, do you adjust the sales price? If they tell you yes, dont worry as much.

     

    Hope this helps and Welcome!

     

    Gail

  • Philip Hamid July 11, 2011 at 1:45pm

    Thats the way to go !

    Kevin Kudrna said:

    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. 

  • Ray Snook July 11, 2011 at 5:47am
    Yes it is interesting how short sales seem to get overvalued and regular sales seem to get undervalued. I almost lost a regular sale because the house was undervalued by 20,000 and my buyer of course wanted to revise their offer to match, the seller didn't want to...the valuation was plainly wrong to all except the person wielding the power to make or break a deal (who gets paid regardless)!   I think it is all a big plan to cause us as much grief as possible!  (not really... but it feels like it sometimes)
  • Sandra Koutsopoulos July 11, 2011 at 5:20am
    Isn't it ironic how we have the HVCC now because Appraisers were accused of pushing values for the Loan Officers and Lenders, and now I'm hearing that Realtors are being required to push values to retain BPO business?!  The common denominator here seems to be the lenders demanding higher values, which is part of what caused the housing bubble in the FIRST place.
  • Christina Conrad July 11, 2011 at 5:00am
    LOL..way to go Brenda...you sound like my boss...
  • Jeff Payne July 11, 2011 at 4:25am
    Well said Brenda, I have one asset manager (BPO company) that constantly wants me to change my values, sometimes with big differences but I always stand my ground and provide good documentation.

    Brenda Houghton said:

    A BPO agent doesn't have to bow to the lender if one has good data supporting one's value.  I have had asset managers come back at me with higher valued properties, but frequently these properties are outside their own criteria limits relative to size of property, distance from subject and sale date.  One BPO was returned to me 4 times, but I held firm with my more relevant comps.  I am the one with market expertise, not some asset manager or investor in an ivory tower 5 states away. 

  • Brenda Houghton July 11, 2011 at 4:14am

    A BPO agent doesn't have to bow to the lender if one has good data supporting one's value.  I have had asset managers come back at me with higher valued properties, but frequently these properties are outside their own criteria limits relative to size of property, distance from subject and sale date.  One BPO was returned to me 4 times, but I held firm with my more relevant comps.  I am the one with market expertise, not some asset manager or investor in an ivory tower 5 states away. 

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