RAM REAL ESTATE AND FINANCIAL SERVICES PRESENTS

BPO’S, REO’S and SHORTSALES

WHAT IS A BPO?BPO– STANDS FOR BROKER PRICE OPINION. It only

pertains to 1-4 units. Actually it’s a brief analysis from a

real estate broker’s perspective as to the value of a

property. Typically it’s a two page report with photos. Each

report request from a company will come with their own

forms.

The ordering institution will:

1. define the parameters

2. request between 3 to 6 photos

3. require 3 sold and 3 current listings from the MLS

4. request answers about the area and neighborhood

5. require that all information be accurate and timely

BPO USE

Why do institutions use BPO’s?

They are used for the following purposes:

1. Foreclosures

2. Acquiring mortgages (audited packaged loans)

3. Any default of payment by owner

4. Checking or verifying an appraisals

5. Condition checks

6. Insurance purposes

WHAT ARE THE BENEFITS TO THE AGENT DOING BPO’S

Benefits to the agent include:

1. ability to stay on top of values in your community on a

daily or weekly basis

2. learn how to value all different types of properties

3. cash flow

4. see market trends before they happen and are

reported in the media.

5. can lead to REO Listings

6. residential BPO’s can lead to commercial BPO’s

which are anticipated to be needed next

TOOLS AND SYSTEMS REQUIRED TO PREPARE BPO’S

Systems required:

* MLS (do not use comps older than six months)

* Email address

* Internet Access

* Tax Records (agent first from First American Title)

* Yahoo maps

Tools required:

* Computer and /or laptop, or Blackberry (preferred)

* Digital camera

* Printer, copier, fax/all-in-one machine

* Thomas Guide or Navigator

HOW TO DO A COMPLETE BPO

Visit the Property* Look/Evaluate subject and surrounding homes* Take good photos of front, address, side, street,

rear and damages.* Use a checklist to answer required questions;

1. Is the landscaping well kept?2. New windows? Front door? Style?3. Signs of peeling paint? Any additions?4. Colors?5. Garage parking?6. Neighborhood conditions? Neighborhood comparison?

SAMPLE PROPERTY PHOTO SHOTS

Examples;

* Front view

* Left side

* Right side

* Address

* Street view

COMMON PHRASES USED IN A BPO

Common Phrases;

* Quiet and high owner occupancy

* No signs of any deferred maintenance or damages

* Market conditions are stable or unstable

* Subject is a newer two story contemporary on a

standard level lot.

* Close to schools, park, shopping and freeway

* Pricing must be competitive and be prepared to offer

some financial incentives due to slowing market

conditions

* Expanded search radius due to lack of similar

properties in subject’s neighborhood

* Used extensive search on tax and MLS records

FOR AN EXCELLENT BPO

1. Be on time

2. Be descriptive

3. Check Spellings

4. Do not leave blanks on form

5. Good photos

6. Good Comparables

7. Finish with a strong statement

Sample BPO Forms can be down loaded from the

ramloans website.

AGENT’S LIABILITY ON DOING A BPO

Liability is limited to the information provided

from the MLS and Tax Records. Make sure that

you estimate property characteristics in your

report, that is clearly stated in the comments. If

you do not fully disclose any relevant information

you could be liable.

REO—WHAT IS AN REO?

REO—(Real Estate Owned) is a property that

goes back to the mortgage company after an

unsuccessful foreclosure auction.

The bank now owns the house that they

originally loaned money to someone to buy.

Mortgage lenders are not in the business of

owning real estate, so they will try to dispose of

their REO homes as quickly as possible

REO LISTING FAILURE

What is a listing failure and how does it occur?A listing failure occurs due to gross negligence, or fraud. The end result is additional losses tothe mortgage company but a potential profit to a property flipper.

One way it can occur is through what is known as hidden listings. This is when a broker lists the property in such fashion that it cannot be foundby local agents working with buyers. If the listingis hidden, eventually the REO owner will keep dropping theprice until sold. At some point, when the price is lowenough, the listing agent can call a friend to buy theproperty, which they will flip after closing.

HOW LISTINGS ARE HIDDEN

Three ways to hide a listing are:1. incorrect data2. incomplete data3. place a warning sign on the property rather than a for sale sign

Example of incorrect data is simple putting in the wrong subdivision. While an example of incomplete data is such things as zero scare feet,no bedrooms, incorrect age of the property, or noroom sizes.

HOW LISTINGS ARE HIDDEN

In the Exclusive Authorization and Right to Sell

(lenders have their own contracts) it expressly

forbids agents from purchasing any of their own

listings.

Once you got the listing where can you look for

buyers other than from conventional sources?

Craig’s list promotion to investment clubs are a good

source.

OUT OF TOWN BROKERS

The best asset managers and REO owners will

only allow local brokers to sell local listings. This

Makes sense because they know the area best

and they can service the listing best. It is

impossible to service listings when you are 100

miles away and a two hour ride on the best of

days. The maximum area allowed for brokers is

generally 30 miles from their offices.

REO Vs SHORT SALE

What is ShortSale? A Short Sale is a sale of real estate in which the lender agrees to take less thanthe amount owed on the debt, in return forthe sale of the property to a third party,usually at no cost to the borrower and inmost situations, the lenders will removeany further mortgage debt to thehomeowner.

PROBLEMS WITH A SHORTSALE

If there is more than one mortgage both have to

agree on the division of funds if there is

sufficient amount to cover all of the first and only

a portion of the second.

This could be an opportunity for a loan officer to

help the second trustor get a loan to pay-off the

First thus protecting their investment.

HOW DO I GET STARTED?

REO’s:1. RAM has provided you with sample letters,

email addresses, departments and phone numbers of institutions to contact to get approved to do REO’s.

BPO’s:1. RAM has provided you with sample letters,

email addresses, departments and phone numbers of institutions to contact to get approved to do BPO’s. Sample BPO forms are being handed-out and a computerized version will be made available.

HOW DO I GET STARTED?

ShortSales:

1. RAM has provided several PowerPoint

presentations on the A to Z of ShortSales. and Documentation required for a ShortSale.

2. Agents can get a list of people from the title companies who hold second mortgages and may need your services. Or a list of people with notices of defaults.

REO INSTITUTIONAL LIST

1. Accredited..accredhome.com

2. Assetlink…assetlinklp.com

3. Atlas…atlasreo.com

4. Auroa…res.net

5. AVM…assetval.com

6. Badisso…badisso.com

7. Bankers Asset Management..bankersassetmanagement.com

8. Bayview…bayviewfinancial.com

9. Brighton Real Estate…brightonreo.com

For a complete list refer to ramloans.com website.

BPO INSTITUTION LIST1. Clear Capital…bpotracker.com

2. Land America…ladsvalues.landam.com

3. Lighthouse Real Estate Solutions..Irescorp.com

4. Intergrated Asset Services..iasreo.com

5. Emortgage Logic..emortgagelogic.com

6. Broker price Opinion…brokerpriceopinion.com

7. Integrated Property Source..iprops.com

8. Go-BPO…gobpo.com

9. First American Residential Value View..farvv.com

10. Lenders Financial Services..golenders.com

11. Single Source Property Solutions..singlesourceproperty.com

12. Imortgage Services..Imortgageservices.com