i’m looking to compile some methods that investors use to influence the bpo ethically. any info on this topic would be appreciated.
thanks,
ryan
Ryan… A BPO is an OPINION of value from a real estate agent… Run your comps do your repair due diligence and always be there at BPO inspection and supply the agent with your number…
Agents get 40 bucks for a drive by and 115 for an interior… Do their job for them… Numbers don’t lie
my experience is that most agents don’t want to accept the comps provided. i’ve even included repair estimates, but once again, most don’t want to see these anyway.
i wonder what other avenues other investors are exploring to help obtain the bpo number they need.
What Michael told you was 100% correct, yet you’re responding in such a manner that it makes it apparent you want the “appraisal” to come back the way YOU want it to, for YOUR personal benefit. Well, all SS investors want that, yet don’t over reach on this.
IMO, what you’re doing when you are “influencing” the BPO is making sure the BPO agent doesn’t miss features of the home that a prudent Buyer would catch and use against the Seller, or Bank, were the property to be sold to a retail buyer. Each property will ultimately attract a new buyer who will likely look at 10-20 houses before making and offer, and when they do, they will likely employ a very thorough, professionally-trained, property inspector to go over the house with a fine tooth comb, pointing out all of the defects and deficiencies.
What you want to do is help the BPO agent realize that this is the reality of the situation. Unfortunately, some BPO agents price them way too high because THEY want the listing. That’s why you need to do your homework, and to get your own comps. I typically just show the BPO agent that I have them, then ask if they want my list. That’s hardly unethical, yet could backfire if you give them a hard number of what you think is the value. I don’t do that, because maybe I will influence them to be too high! Not good.
Good luck!
I will state 2 things that I do that I think is what you are looking for or asking…
1 I pay for a home inspection and I go thru the home w/ inspector and point out anything wrong w/ it. If it incorporates construction I get additional estimates (this is common though)
2 Then on my executive summary letter to the bank to start the ss process near the end I let the bank know that if they agree the loan qualifies for short pay negotiation, then I would like them to contact our company and me personally since I am working on it, for the BPO. It is at this ponit that I state I would like the BPO to be reflective of a 90 DOM value and if the home needs work I also will state here that I would like comparables to be other foreclosed properties. I do this because rarely does any negotiator look at this (in my personal experience) but what I do is I highlite this and when I meet the BPO person at the house (strongly encourage) I will hand him these 2 things w/ the part from the executive summary highlighted and I tell him/her that i had a home inspection done and I also have included w/ you the original executive summary that the bank has acknowledged and agreed w/ to this point.
It depends from there what questions or repore we have. I have found the person to be always responsive because there is really nothing for him/her to get defensive w/ me about.
Hope this helps.
I am still looking for someone to help w/ how to title the property to get around the 90 day flip or seasoniing rule…anyone??? please help! Thank you
thank you for your replies everyone.
burns1,
would you mind elaborating on this “It is at this ponit that I state I would like the BPO to be reflective of a 90 DOM value and if the home needs work I also will state here that I would like comparables to be other foreclosed properties. I do this because rarely does any negotiator look at this (in my personal experience) but what I do is I highlite this and when I meet the BPO person at the house (strongly encourage) I will hand him these 2 things w/ the part from the executive summary highlighted and I tell him/her that i had a home inspection done and I also have included w/ you the original executive summary that the bank has acknowledged and agreed w/ to this point.
It depends from there what questions or repore we have. I have found the person to be always responsive because there is really nothing for him/her to get defensive w/ me about.”
perhaps maybe a little clarification. as i understand it, you put on the cover sheet that you want it to be compared to other homes that are 90 DOM (why?) and other foreclosed homes…you mean REO’s?
thanks in advance
ryan
My area is 6-9 months DOM maybe even 1 year. 90 DOM is an aggressive time frame that should gain you 15% off opinion of value…thats why!
that makes sense. how about your request to compare to other foreclosures. what is your basis for requesting this and they use other short sales or REO’s?
Well said Matshingdo001. It’s funny to be true. Just kidding, you are serious right. Whatever all the best.
I have a lot of BPO agents flat out ask “where do you need it to come in at”
When they say that I know I have a deal.
I give them this
- 3 sold comps
- 3 active comps
- my offer to the bank.
- repair list
- A spread sheet justifying my price where I want the BPO.
I pull comps with 2 REO’s and 1 non-REO. More and more the banks want comps from the BPO agent to include REO’s. My comps are quick sale comps, not retail comps.
I tell the BPO agent that here are comps, our best offer is “X” that number is below where I want the BPO to come in. I tell them it is a crazy market out there and those darn appraisers did bad things 3 to 5 years ago. I then ask nicely for a BPO price where I need it. I generally get the price I need or want.
Influencing a BPO is easy. Just be nice, have comps and ask for the price you need. They want to help. It’s human nature. 1 out of 10 times will you run into a BPO agent that is a jerk.
uum - i’d like to know how you catch the agent doing the bpo if it’s a drive by…because they take about 19 seconds to complete - 2 to 4 pics of the home and street - - 19 seconds for 2 pics and maybe up to 26 seconds for 4 pics…but i’d say the average is about 19 seconds.
lol
and how do you know what agent is performing the bpo?
i guess you could call the bank…but who do you talk to? the bank doesn’t order the bpo direct to the agent - they use AM companies like clearcapital or singlesource - those aren’t banks.
and what - you call the bank - the bank calls the AMC and then calls you back???
in my experience - it’s all email and it’s right to the point. getting to the negotiator or talking to someone at the bank that knows what they’re doing - is a challenge in and of itself…that takes time as well to get the ins and outs of each bank…heck - each transaction.
i’ve always been called when a bpo is issued. i give them the listing agents information. if they have access to the MLS listing, they will see they need to call the agent for access. this allows the listing agent to meet them at the property.
if you have it as vacant go direct, they will go on there own and it could backfire pretty bad (this happened one deal im partnered with and the bpo is very unrealistic but the bank doesn’t want to issue another one…yet)
UUM…I put on my cover sheet that I have access to the property and it needs an interior BPO due to repairs needed and I give them my phone number. I have never accepted a drive by BPO as my value.
The agent calls me, I meet them at the house and I get the agents card. I call them two days after the BPO and I ask them if they were able to get me in the ballpark needed.
This isn’t rocket science.
As a long time BPO agent, I found much of this interesting. Some way off base, some dead on.
Couple of points. Yes, some agents are lazy and will let you do all the work. Should they ever get caught they will not be doing these any longer. These are the only agents you will be influencing.
One myth that was given is that the BPO will come in high in order to get the listing. This is a potential short sale, not an REO. No listing is part of these BPOs so that is just plain wrong.
I personally will be happy to meet the investor/would be buyer at the house and I will politely listen to them and take the comps if they have taken the time to pull them.
Then I will do my own BPO. I will quickly see if you are inflating the repair bid and if your comps are accurate or if you just skimmed off the bottom using the worst you could find. If so, hopefully that doesn’t influence the agent the other way :>)
Bottom line is that you won’t influence a good BPO agent. You will merely be confirming the market data available. And that’s OK.
Oh, and if you call in a couple of days for the value I gave the bank…
Call the bank. I am not authorized to give it to you. Sorry.
Just to add a little…
The question was how to ethically influence the BPO… No one on either side of the fence should try and illegally manipulate the value of a house by steering an agent with some sort of enticement…
The lenders use an AVM as well as order a BPO so the double check system is in place… Even worse…
When you meet with the lenders BPO agent ask them how many Pre-Preforeclosure BPOs that they are doing… Most banks are ordering a BPO at 60 days late… Hard to influence a BPO on a property you aren’t aware of… I bet you would like the list of those names… Heck if you want a list of names 60 days late they only .25 each all over the net.
Now if you want to have control of your market make certain you’re buying within the same geographical area. List your houses with multiple agents at a price point well below what you would take, (that will start a bidding war anyway) the low price most definitely influences the BPO downward and with multiple agents the BPO agent wont think twice.
As for what price to input into the MLS as the “SOLD” price that is definitely an ethical question… MLS rules state that the agent must log the sold price of the transaction however there is only one MLS listing for two MLS solds.
Heck price multiplication has been going on forever… Ever wonder how companies know what a house sold for if it wasn’t listed in the MLS… They look at transfer tax paid and run the reverse calculation. Most definitely there are investors who do not report the correct price paid on a transfer tax as to limit the perceived profit on a flip to the subsequent lender… Imagine if you paid 50k for a 150k house… You may have issues with even a non seasoning lender who would look at the transaction as flipping fraud… Some investors will inflate the tax and pay a tax based on 125K purchase so the pre on the resell indicates it. I wouldn’t suggest doing it however.
way off topic sorry.
Be straight to your sale. It’s not ethical. Influencing an BPO agent should not be your job. Let it be even profits gets short.
nick, i disagree.
What happens when the BPO agent comes way above what it should be? or what happens when the banks become unrealistic on their required pay off amount even though you’ve offered 92% above the BPO and it typical that lender takes less? you, the homeowner, and everyone else involved (including the lender) loses.
if you have 5 bpo agents do comps on the same house, you will get 5 different results. this is merely a matter of opinion, just as in the used car business, you can negotiate an purchase price that works for you. based on your negotiating skills will determine the amount of profit you make. (provided your in range of the BPO obvioulsy).
as steelep mentioned, you’re only confirming available data. so as a negotiator, you want to use whatever tools you have to your advantage. this is true for any business.
the unethical part comes in when investors stage houses (ie/ cause destruction to the house to get a low BPO).
I just want to respond to steelep. BPO agents DO come in high to get a listing. I was at a BPO where the agent let it slip that if it foreclosed she would probably get the listing as an REO. Interestingly that BPO came in VERY high, so yes it happens.
i thought any agent could be a bpo