Broker Price Opinion Outsourcing and Management

As the market improves and less foreclosures hit the market, the volume of Broker Price Opinion’s decreases significantly. Many realtors find it easier to acquire business on the listing end, and thus many drop out of the BPO scene altogether for greener pastures. What does that mean for the remaining BPO agents? More volume. It is the equivalency of the middle class getting squeezed and all the money getting sucking up by the 1%. Survival of the fittest is the name of the game and only the agents with the most streamlined systems, leveraged manpower, diversified portfolios, and inside connections with asset managers are still in the game. It also makes sense from a financial point of view to have simplified Broker Price Opinion management. Does it cost more for a valuation company to assign 1 Agent 100 orders or 100 agents 1 order? Logical, yes. Ethical… that’s another debate.

So what are the secrets for having a streamlined system, leveraged manpower, diversified portfolios, and inside connections with asset managers?

1. Streamlined System – As a BPO/REO agent you need to have a complete system for broker price opinion management. A system which tracks every order for general accounting. A system which organizes each tax record, document, and note pertaining to the property. If outsourcing Broker Price Opinions, a system which gets the assignment round trip from you to the assigned and then back to you in completed form, with you receiving status feedback throughout the trip (think auto email responders). And oh, it needs to be timed! Turning over orders in 24 Hours or less will net a significant increase in business over standard 48 hour turnaround time.

2. Leveraged manpower – A valuation company solicits out 100 orders in your coverage area. This company has been dead for 2 months and now is your chance to prove yourself as a viable high volume agent. This is when Broker Price Opinion outsourcing becomes so powerful. If you have the manpower to fulfill these orders then the companies catch on quickly that you have the ability to output high volume work, thus they turn to you the next time they need a Go-To agent, creating a snowball effect.

3. Diversified portfolios – This is such a crucial aspect of the business. Many agents get in a groove with one or two high volume companies and neglect working with any other companies. In a quickly changing world, some of today’s slow BPO companies are tomorrows future so don’t stop signing up to new companies and/or reapply to old companies which rejected your application years ago.

4. Asset Manager Connections – Create ways to be heard. There are thousands of agents in the field so you need to advertise how you’re truly a cut above the rest. Every assignment email solicitation has the name and email, often even the phone number of the person who will be quality checking your orders. Sometimes the asset manager’s information will be listed on the form. Treat these as leads and contact to solicit more orders. Maintain an open phone and email line. Respond to quality controls as quick as possible.

5. There is no point 5 but it’s always supposed to end on an odd number, right?

Short Sales – Influencing The Brokers Price Opinion (BPO)

When you do a short sale, the lender most likely will order a BPO.

BPO stands for Brokers Price Opinion and is a process by which a realtor

appointed by the lender, comes out to evaluate the property and give his “opinion”

on what the value of the property is. So the lender sends a realtor out to the

property and it’s your job to influence the BPO to come down as low as you can.

This is the whole key to a successful short sale. This is why you want the lender to

contact you, so you can meet the realtor at the front door and influence their

BPO to come in as low as possible. To build your case, the first thing you

should do is show up with a list of repairs and estimates for the property. If you

have to go get a contractor to bid a job or repair, go get one. The higher the quote,

the better. This is good evidence. The second thing you should do is show up with

a list of comps in the area that are low. Most real estate agents appreciate you

doing some of their work for them. Provide them with the lowest comps you can

find and they will decide if they want to use them or not.

When you meet the realtor on the property steps, just tell him you are the buyer and

doing a short sale on the house. Then you will proceed to walk the realtor

through the property. When you are walking through the property make sure you

point any and every repair or problem with the property. Again, you are trying to

make the value of the home come in as low as possible. If you are dealing with a

nice house with minor cosmetics, you may really have to search for problems.

Then call him the next morning to see if he was able to get the price you wanted. Sometimes they will tell you sometimes they won’t. Just ask to find out. If they won’t tell you, call the bank. Many times they will tell you. You really have no control over this process. You can encourage the BPO to come in low, but this does not always mean they will come in low.

If there is someone living in the property, you may want to ask them to leave when

the realtor comes out to do a BPO. If they can’t, just tell them to stay out

of the way. Explain to them you will be trying to make the house value look as low

as possible. They may not understand why, just tell them it is the only way to save

their house. Also, tell them not to worry about cleaning up at all, leave it the way it

is. This is the one time your house can be a mess. You need to make the value of

the property look as low as possible.

If the loan on the property is FHA or VA, they will not take less than 82% of the BPO.

Usually you can expect the BPO to be in the range of 80-90% of the

repaired value. So if you have a house that is worth $120,000 after repairs, the BPO

you would guess to be about $98,000 to $108,000. Then multiply that amount by

82% and this should give you a good estimate of what to offer. If it is not a VA/FHA

loan, then you can offer whatever you want. It is a good idea to start low, just in

case your BPO comes back lower than you thought, you can always raise the offer. It

is an educated guess to find out what the BPO will be. If it comes back

high not in your favor, sometimes you can call the loss mitigation department and

tell them the BPO is way to high. Many times they will work with you and

order another BPO. Whatever you do, don’t ever give up. If they don’t accept it,

negotiate with them some more. Ask them what they are looking for, or what they

are trying to get. Sometimes they will tell you, sometimes they won’t. Be

persistence. Be patient. Ask, ask, ask. Part of being successful in this business is

how you negotiate. You don’t ever want to be rude to them, but let them know

where you stand. Make them aware of what’s happening to the property.