The BPO Agent Evaluation Model and Perspective
It is good to understand the general perspective of the agent conducting a BPO (Broker Price Opinion). Did you know a BPO Agent usually makes $40-50 for each BPO the foreclosure bank orders? Consider what a BPO agent must do for that type of pay. The BPO Agent has to drive out to property, spend 30-60 minutes or more inspecting it, take 10-20 pictures, drive back to their office (which many work from home), spend ANOTHER two-three hours putting together all the data they collected and uploading the real estate pictures and information to the third party company the bank hired to order the BPO. All of that work for $40-50 buckaroos.
The reality is the BPO Agents do not make any money if they have to spend A LOT OF TIME with one BPO. They have to burn through as many BPO’s as possible to make a few hundred bucks every two weeks. This doesn’t mean they do not do a good job conducting one. In my opinion, BPO Agents they are simply not motivated enough to spend the required time to produce an accurate value on the property every time. Hence here is where investors can make some serious profit.
Many banks typically are not looking at just one property when they consider a short sale transaction. They are considering an entire portfolio and YOUR property may be .25% of a 50-100 million dollar portfolio. Banks for the most part do not make time or spend enough money to really care if they lose MORE MONEY on ONE house. Think about it. I think they spend as little as possible to have some type of paper trail to present to their superiors and Senior Lender/Credit Officers, so they can sign off for compliance with standard operating procedures for the short sale approval.
The incredible part of this is even though banks spend as little as possible to obtain values on properties and short sale them when a Loss Mitigator writes a letter of recommendation. They still SAVE MORE MONEY by accepting short sales and not letting their properties go into foreclosure and complete the auction process. Can you believe that? With all the mistakes and lack of due diligence on THEIR part, they STILL SAVE MONEY WITH A SHORT SALE! That is astounding to me, but hey…I’m not complainingn too much and you shouldn’t either because it creates great opportunities to profit in short sales for all of us. So…carry on with the bad habits banks….carry on.
Here are the basic three factors that are considered when a bank orders a BPO
• What is the condition of the property?
• What have similar properties in the area sold for off the MLS?
• What does the home need to be sold in 60-90 days or less?
You got anything to add to this? I appreciate your comments.