Brokers Price Opinions (BPO) can occur under multiple conditions. Three of the most popular situations that call for a BPO are 1. owner refinancing, 2. default of loan, 3. the property has become Real Estate owned. In a refinancing scenario the borrower (owner) has asked the bank for either forgiveness of a portion of the loan (loan modifications etc) or to borrow on appreciated value. In a default of loan scenario the borrow has fallen behind on making payments. In a Real Estate Owned (REO) scenario the property has fallen under the ownership of the lender. In each of the above scenarios a Realtor is sent to the property to perform a BPO.
There are two different type of BPOs. Depending on the nature of the assignment exterior or interior BPOs may be requested. A BPO consist of taking photos of the property and providing the lender with a comparative analysis to determine the current value of the property. A BPO is similar to an appraisal but BPOs are the opinion of the Broker/Realtor, not a licensed Appraiser. The Appraiser usually has the final word but lenders see BPOs as a cost efficient way to determine the value of a property before it goes into foreclosure. A Realtor benefits from being involved in this process in two ways. Primarily, the standard payment for completing a BPO is anywhere from $37 to $75. Minus the travel time to obtain photos, and experienced Realtor can complete a BPO in thirty minutes. Opportunities like these provide revenue for Realtors with little real estate activity concerning buyers and sellers.
Depending on the frequency of lender activity in your area regarding refinancing and defaulted loans an experienced Realtor can easily earn an additional $2000 per month doing BPOs in their downtime. This type of income can help a Realtor remain a Realtor when a market goes sour. There are also other benefits to doing BPOs. When properties go into foreclosure the bank assigns the Real Estate to an Asset Manager. The Asset Manager is the banking official responsible for maintaining REOs. When a property is foreclosed on by the bank, one of the first things an Asset Manager will need is a BPO. If the BPO is qualified by the appraisal that will happen later, the Asset Manager under most conditions will assign the REO to the agent who completed the BPO. This is worked into a easily remembered formula that we teach in our Real Estate workshops at Madjai Archers; "REOs equal BPOs and BPO equal REOs". The rule is, do not look to do BPOs when there is not a a lot of REO activity in your market. Likewise, do BPOs when you see REO activity. Develop relationships with Asset Managers and most likely the Asset Manager will list the property with you. Developing relationship with Asset Managers is how Realtors become REO specialist who only sell Bank Owned Properties. Doing good BPOs is the best way to get the attention of an Asset Manager.
Feel free to take advantage of the programs we offer Realtors who could use additional income. We teach members how to get BPO request forwarded directly from Asset Managers to the Realtor's inbox. We teach how to do a proper comparative analysis with techniques that most often list the value of the property within 10% of the appraisal. We teach the do's and don'ts of getting REOs by producing quality accurate BPOs. Within our conglomerate you will meet licensed qualified Realtors, BPO and REO specialist ready to answer questions 24/7.