The BPO business is an exciting niche of the foreclosure industry to be in today. Whether you are a veteran real estate agent or you are brand new to the business, real estate agents typically spend several hours every week creating comparative market analyses (CMAs) for potential clients with the hope of landing a listing or convincing a buyer to make an offer. In the end, every agent hopes that their CMA will result in a nice paycheck; but this is not always the case. When you complete a BPO, however, you are certain that the report you spend an hour or two completing will result in some additional income for that month.
So what is between you and that pay check when you complete a BPO? Other than the obvious need to photograph the property and complete the report, there is a department of every BPO company that is in charge of quality control. If you cannot get past this department, then you will not only delay how quickly you get paid, but it will determine if you will receive any additional BPOs from that company. Also, if your orders are turned in on time and without errors, your chances of selling that property when it gets foreclosed on increased because the banks know you are a reliable real estate agent.
After completing over 2000+ BPOs over the past 18 months I would like to share with you 10 Secrets to Completing Your BPO Reports Like a Pro:
1. Immediately upon acceptance of a BPO order, read the confirmation email and write down the DATE and TIME that the order is due. Note the time zone of the due time as it may be different than your current time zone. Not paying attention to this can make the difference between a report that is turned in on time and one that is late.
2. Note whether the order is an exterior or interior BPO. If it is an interior, look for point of contact (POC) information to gain access to the property as soon as possible. Also note what photos are required. There is nothing worse than forgetting to take the right photos. It is better to take too many photos than not enough.
3. Most BPO companies have a website that you log into to complete the report. Be sure to log into that company’s website and read the full details of that report which will include the guidelines for that report. This will save you a lot of trouble in your analysis of the property and when you go to research comparables.
4. Pull the tax record and/or call the County Assessor’s office to learn as much as you can about the property. Note the property’s parcel number, market and land assessment values, if the property is residential or commercial, current property taxes for the entire year, if any taxes are delinquent and what year the last assessment occurred. The property taxes will be provided by the Treasurer’s Department.
5. If you do not have access to the interior information of a property, call the BPO company and ask if they have a previous appraisal on file. Also, if you are having trouble finding comparables, then call the BPO company’s quality control department and ask for guidance. They can usually help you to properly expand your search criteria to find additional comparables and will make notes in the system that will prevent you from getting your order kicked back. When all else fails, find the best comparables available and provide thorough details in the report as to what criteria you expanded on and why.
6. During the completion of some reports you will be required to make adjustments to comparables. This process can be tedious and time consuming if you do not know how to do them. My best suggestion is to look at your market and determine how different attributes such as square footage, bedroom count, bathroom count, age and lot sizes vary in terms of added benefit to a property. From here you can create a system in which you can adjust for differences between the subject property and the comparables you have chosen. Remember, you only make the adjustment to the comparable with respect to the subject property only, not between each comparable. This process acts to put all of the comparables on an even playing field when evaluating them against the subject property so a bigger picture of the subject’s fair market value can been assessed.
7. When selecting comparables, make sure that the interior square footages of the comparables bracket that of the subject property. For example, if the subject is 1000 square feet above-grade, the comparables could be 800 sqft, 950 sqft and 1100 sqft. These comparables would bracket the subject because 1000 sqft is between 800 sqft and 1100 sqft. Also, all square footages are measured in terms of gross livable area (GLA) and include only square footages above-grade (ground level). Basements are not part of a property’s GLA because they are below ground level.
8. The final value for the subject property should be bracketed between the lowest and highest selling SOLD comparable. For example, the final value is $100,000 and the sold comparables have values of $91,000, $98,000 and $103,000. As a result, $100,000 is properly bracketed between $91,000 and $103,000. Your active comparables do not have to bracket the final value. In most markets, the active comparables are priced above the final sold value unless the market is declining significantly each month.
9. Your final value should also be within the range of the subject’s neighborhood sold values for the past 12 months. This is typically what is asked for when a report is looking for the ‘neighbor values’. For example, the final value is $100,000 and your lowest selling home in your subject’s neighborhood is $55,000 and your highest is $165,000. The $100,000 final value would be properly bracketed within the subject neighborhood’s range of values.
10. Be sure to double check your entire report for spelling and grammar errors before submitting it. You will also see that many BPO companies have a quality control checker or validation tool that looks for errors in the report. This only checks to see that your numbers are within the acceptable guidelines and will not check for spelling and grammar errors. If you run into quality control errors, then it is vital that you review them thoroughly and write explanations for why you had to exceed the BPO company’s provided guidelines on each and every aspect that is mentioned. The more information you provide, the less likely the report will be flagged and returned by the quality control department.
There are a lot of variables that need to be taken into consideration during the BPO completion process. Hopefully these secrets that I have shared with you will help you complete your BPOs faster and save you from wasting additional time answering the questions of your BPO company’s quality control departments.