Comment

Comment by Michael Schneider on February 23, 2011 at 4:13am

I have not seen this BPO problem in my area, on my deals, when the Servicer is establishing value for the review of a short-sale offer.

Comment by Alan Remigio on February 23, 2011 at 4:12am

Valuation by a third party paid by a lender IS the centerpiece for the short sale process. There have been exceptions and I have been a party to them.

For the agents doing BPOs...how many are interior BPOs? Do you comp using REO and properties in foreclosure? I know it's tough to spend a lot of time on this because the flat rate pay is low and some of the agents I personally know boast of their ability to see 10 or more homes, daily. 

As an investor, I know quite a few agents doing BPOs. Some of them tell me of the strict guidelines they have to adhere to in order to continue to receive business from lenders ( I remember those same complaints from appraisers, some years ago, if you know what I mean).I also know it is a common practice for some lenders to use more than one BPO agent on a property here in PA and pick the best that suits them. For the RE agents, your BPO agents, not all, are shooting YOU in the foot. Many continue to do drive bys and not the thorough report a short sale requires to conclude real value. I personally cannot see how one can write a fair valuation when seeing 10 plus properties daily and submitting their report within the time frame a lender demands.

For those of you who are doing this right, more success and kudos! For the others that view it as just an income stream, no one is done a favor for your lack of thoroughness. Just ask your fellow agents discussing valuation on this site. 

Comment by Kristie DeLay on February 23, 2011 at 4:05am

Geesh! I must be naive--I started doing BPO's recently and I approach each one with the purpose of determining the price at which the property would sell. It never occured to me that folks would be inflating their BPO to try to get the listing. Of course, as an associate broker with a small RE company, I don't expect to get these listings anyway--in our small community they usually go to the large franchises. Thanks for the eye-opener, but I think I liked the world more when I knew less!

Comment by Brigitte Powell on February 23, 2011 at 4:01am

I've done many BPOs in our area Charlottesville, VA. and have noticed that the higher BPO got the listing......but, I got paid for my time and have not compromised myself. Never got the listing but they all sold for much less than they were listed for. Vindicated.

And then.....as you all know, sometimes it pays not to be the first one to get the listing :-)

I have also experienced an out of area agent doing a BPO on my Short Sale and that person never put one foot in my listing. Instead she sent an agent from the Franchise (and in our area) to take pictures of my listing. I complained in writing to the negotiator but got nowhere. Second BPO was by an agent IN our area and came back much closer but way to late since they had a great offer many months ago and blew it by not accepting it. It's almost a year later and they are now willing to accept now what they blew off then. I had provided comparable sales and actives on three seperate occasions but they blew me off.

Comment by Thom Colby CA Brkr 888-391-5245 on February 23, 2011 at 3:58am

There are many agents who perform BPOs with the sole intention of getting the listing and do perform them to the standards required.  Then, there are just as many who don't care about a potential conflict of interest and manipulate the BPO value to ensure they get the listing.  I've done thousands of BPOs over the past 5 years and have never taken an REO listing on a property where I performed the BPO.  I also never discuss value with the Listing Agent or the Borrower when doing a BPO (as the BPO order requires).  If an agent shows up at my BPO appointment with comps, etc. I thank them for their effort and suggest they use them for a discussion with the seller but, I don't want to see or discuss comps or value.  BPO's are a small (but important) part of my overall business which I take very seriously.

 

I think it's like a lot of activity we see everyday.  There are agents who;

• Perform BPOs with the intention of getting the listing,
• Agents who double-end transactions with the sole focus on the super-sized commission of both sides,
• Agents who are the Listing & Selling Agent as well as the Lender, the Notary and the Appraiser on the same transaction.

And then there are those who do none of the above.  I hope the majority is the latter.

 

Thanks for the conversation !

 

Thom Colby

Broker / Negotiator

Newport Beach CA

 

Comment by Steele V. Propp on February 23, 2011 at 3:36am

The flip side of this is the listing agent who meets the BPO agent at the site and tries to "influence" the BPO.  Luckily most agents I have worked with in this situation have not been pushy.  And if they want to provide comps I am happy to look at them.  I, however, am not so lazy as not to pull my own.  Like Aneetra I find I have a very good record of valuing these properties.

 

The long and short of it is that there are bad (poorly trained as well as self serving) agents out there.  Be aware no matter what side of the BPO you are on.

 

Don't make generalizations that really only fit a small percentage of agents.

 

My opinion, of course.

 

Steele in Minnesota

Comment by Michael Schneider on February 23, 2011 at 3:33am

My "much too high" Servicer valuations are from full-interior, done by an appraiser.

My BPOs done by agents then to be more in line with market reality.

My experience, the issue isn't so much the person doing the valuation, rather whether or not there is a FMV offer for the property, at the time the Servicer performs the valuation.  If there is, then we support the offer.

I try to avoid having an appraiser in the property before the offer.  Otherwise, "Servicer in Iowa" with limited experience in real estate and no knowledge of local market dictates the offer.  Bad scenario.  High variance, ugh.

Comment by Aneetra Isis Sherrell on February 23, 2011 at 3:27am

I don't agree that all agents who do BPO's are unscrupulous.  I do about 20-30 BPO's per month for the same 3 companies for the last 2 years. Not once have I gotten any of the listings, but other REO listings on properties I haven't even seen before. I go back and check my price to their list/sales price and I am generally around 92% accurate.  It's when some agents, however, are trying to manipulate the numbers and actually do undervalue the home.  I have been called by asset managers who try to get me to adjust my value but I refused and quit working with that company. I have taken a BPO certification class taught by "real" appraisers and understand the mechanics that go into it.

 

I also have been doing short sales for the last 5 years before they were common in the market, so I know how important the BPO is.

 

It is the others who think they're going to get the listing that have no clue how important their pricing is in the BPO, they are just using it as supplemental income.

Comment by Steele V. Propp on February 23, 2011 at 3:21am

I did a ton of these BPOs last year for several services.  Was never once offered the listing when the short sale failed (and a good 30-40% did).  Maybe who I worked with had half a brain and could see a conflict of interest ahead of time.

 

Steele

Comment by Ben Benita on February 23, 2011 at 2:03am

Jim, Catherine,

Another GREAT TIP FROM YOURS TRULY REGARDING BPO'S:

 

MANY BPO agents DO also get the failed short sale listings.

 

BEST WAY TO COMBAT A BPO - be the point of contact for the BPO agent, when you are contacted by "John Q. BPO Agent", immediately go to MRIS and see how many REO listings "John Q. BPO Agent" has.

When you meet "John Q. BPO Agent" at the property for the BPO, casually ask him:

 

"...so, how many of these failed short sale listings do YOU get...."

 

then SHUT UP and see how they respond. 

I have heard some of these BPO agents get as many as 80% of the failed short sales delivered to them as REO listings....

 

It ain't rocket science people, particularly when times are so tough for so many agents.  They all know if the value comes in high, the likelihood of a failed short sale and the resulting REO listing ending up with them is pretty good.

 

Like 99.999999% of the entire short sale process, just s imple breakdown in the "system"...know how to over come this, get the contacts for the "BPO Department" like we have....

 

All my best to everyone battling short sales.

 

Contact me at [email protected] if you have more specific questions (I try to keep it short on here)

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