What They Don’t Teach You at BPO Bootcamp

Learn the inside secrets on performing impressive evaluations

In this session:

How to get MORE business doing BPO’s

What Asset Managers & Investors look for

Do’s and Don’ts on evaluation

Info to fine-tune your BPO skills

More Business

Offer Free 2nd Opinion BPOTo AMs you would like to work withTo AMs you currently work withTell them to tell other AMs in the dept

Knock their socks off with a Super BPO

Stepping up your BPO

Quality Remarks Don’t just use canned remarks Use quality remarks that are unique to the property Use remarks that show you know the local market Don’t just say Comp 1 is similar to Subject in all areas Talk about the busy 6 lane street behind the subject, or say that

the closest shopping is 5.3 miles away. Be specific about things good or bad.

Accurate Distance Don’t just use ‘1 mile’ for all http://www.gpsvisualizer.com/calculators

Stepping up your BPO

Quality Photos Full set of photos Shoot as wide angle as possible Good lighting

Include Bids on Recommended Repairs with your BPO Immediately differentiates you from other agents Have detailed photos of the repairs

Turn Over Time The quicker, the more impressive. 2nd Opinions are normally needed on a rush basis

Asset Managers

Inside Scoop

They have hundreds to review

You likely can get away with shortcuts/errors

Stay away from this temptation, it will haunt you later!

AMs closely look at

1. Suggested Prices vs. Comp. Prices

2. Your Summary Remarks

Inside Scoop

AMs questioning a comp used in your BPO Usually means your value is not synching well with the other reports Simply ask the AM if you came in too low/high?

Why AMs call you to make minor changes They have to reconcile 2-3 value reports Varies based on client guidelines It is easier for them to get you to change something than to track down

a 2nd opinion BPO agent or an appraiser Sometimes they are shy to full out ask, or beat around the bush and will

vaguely ask you to revisit your values Just ask them casually “Did I come in too low?” They normally will tell

you. Help them feel comfortable, be accommodating on all changes

Inside Scoop

Remarks, Remarks, Remarks If you are getting calls on

other items on the report, you are most likely not writing enough explanation in the comment section

Anything that is out of the norm, add an explanation

Investors, the Asset Manager’s Boss

Inside Scoop

Investors review the report in greater detail, especially if the property lingers on the market

They audit because their money is on the line!

Inside Scoop

Will review tolerances “Why comp #2 has 2 beds and our subject has 4?”

Want details of repair items with bids to cure (impress them with bids upfront)

They will closely compare the original BPO to subsequent BPOs Keep your BPOs archived for future reference Have good reasons for major changes in value and back up

They will map comps for distance Make sure you don’t make up distances

Inside Scoop

They will take offense to off color remarks

Example:

“Subject property is located in an area with high crime rates and

gang activity.”

Inside Scoop

ALTERNATIVES: “This area is a much older

neighborhood compared to most. Most home buyers are interested in newer neighborhoods“

“This area has a much lower price point than the median price range buyers are looking in“

“A considerable amount of graffiti was noticed on buildings and walls in immediate proximity to the subject”

TIP: Show photos of neighborhood – street view, entry signs, graffiti

Do’s and Don'ts

Do’s

Stay within general tolerancesUse comps within 10% of price of subjectUse comps within +/-10 yrs oldUse comps within 20% in living areaUse comps less than 3 months old if possible,

6 months max

Do’s

If you must exceed one of the BPO guidelines, ALWAYS make sure to comment as to why you exceeded the criteria and why it is necessary

Try to anticipate what the other BPO or Appraisal will come in at and be no more than 15% difference This will cause list price to be too high because they will

normally go with the higher BPO or appraisal price if the differential is too great

Remember the purpose the BPO is to be realistic and accurate in initial evaluation, you get graded on initial BPO value VS. sales price at the end

Do’s

Estimate your BPO to be as close to the Sale Price as possible (you are graded on this) Shoot for 95% to 105% of your original BPO price. This can be tricky when you have rapid depreciation or

appreciation

Make sure your adjustments are consistent Adjustments can be fluctuated depending on how you need the

values to adjust for. Example: You have competition on same street listed at $120K.

Sold comparables found within 2 months can only justify $145K. You can use the adjustments to your advantage.

Don’ts

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Recycle your photos. Every BPO should have a fresh set of photos.

Provide insufficient photos Get close ups of damage, show the busy street over the back

wall, photo the graffiti up and down the street

Recycle your comps on subsequent BPOs

Don’ts

Guess on adjustments

Guess on proximity

Use generic or “canned” remarks

Be vague on repairs Instead of “Replace carpet” be more descriptive i.e. “Extremely soiled, urine saturated carpet replacement”

Forget to update repairs & adjustments if improvements are made You look like a dummy if you replace all carpet and paint in a home and

then on your updated BPO you still say it needs those repairs

Fine Tuning

Commonly Miss-entered Fields

Functional Utility ENTRY = Poor, Average, Good NOT Gas, Electric, Water Used to describe the functional use of the house i.e. 3/1 house is out of date i.e. no space for washer/dryer

Data Source or Verification ENTRY = MLS or County tax records

Commonly Miss-entered Fields

Location ENTRY = Urban, Suburban, Rural NOT Good, Fair, Poor Used to determine how far comps can be away 1 mile for Urban 5 miles for Suburban 5 miles+ for Rural

Site ENTRY = slopped, level etc NOT Good, Fair, Poor

Acronyms to Know

CMA – Competitive Market Analysis BPO – Broker Price Opinion DNA – Property stats (sq ft, beds, baths) CMV – Current Market Value GLA – Gross Living Area DNB – Do Not Buy FROG – Finished Room Over Garage PUD – Planned Unit Development HR/LR – High Rise / Low Rise FMR – Fair Market Rents