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Presentation on theme: "RAM REAL ESTATE AND FINANCIAL SERVICES PRESENTS BPOS, REOS and SHORTSALES."— Presentation transcript:


2 WHAT IS A BPO? BPO– STANDS FOR BROKER PRICE OPINION. It only pertains to 1-4 units. Actually its a brief analysis from a real estate brokers perspective as to the value of a property. Typically its 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

3 BPO USE Why do institutions use BPOs? 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

4 WHAT ARE THE BENEFITS TO THE AGENT DOING BPOS 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 BPOs can lead to commercial BPOs which are anticipated to be needed next

5 TOOLS AND SYSTEMS REQUIRED TO PREPARE BPOS 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

6 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?

7 SAMPLE PROPERTY PHOTO SHOTS Examples; * Front view * Left side * Right side * Address * Street view

8 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 subjects neighborhood * Used extensive search on tax and MLS records

9 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.

10 AGENTS 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.

11 REOWHAT 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

12 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 to the 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 found by local agents working with buyers. If the listing is hidden, eventually the REO owner will keep dropping the price until sold. At some point, when the price is low enough, the listing agent can call a friend to buy the property, which they will flip after closing.

13 HOW LISTINGS ARE HIDDEN Three ways to hide a listing are: 1. incorrect data 2. incomplete data 3. 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 no room sizes.

14 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? Craigs list promotion to investment clubs are a good source.

15 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.

16 REO Vs SHORT SALE What is ShortSale? A Short Sale is a sale of real estate in which the lender agrees to take less than the amount owed on the debt, in return for the sale of the property to a third party, usually at no cost to the borrower and in most situations, the lenders will remove any further mortgage debt to the homeowner.

17 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.

18 HOW DO I GET STARTED? REOs: 1.RAM has provided you with sample letters, email addresses, departments and phone numbers of institutions to contact to get approved to do REOs. BPOs: 1. RAM has provided you with sample letters, email addresses, departments and phone numbers of institutions to contact to get approved to do BPOs. Sample BPO forms are being handed-out and a computerized version will be made available.

19 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.

20 REO INSTITUTIONAL LIST 2.Assetlink… 3.Atlas… 4.Auroa… 5.AVM… 6.Badisso… 7.Bankers Asset 8.Bayview… 9.Brighton Real Estate… For a complete list refer to website.

21 BPO INSTITUTION LIST 1.Clear Capital… 2.Land America… 3.Lighthouse Real Estate 4.Intergrated Asset 5.Emortgage 6.Broker price Opinion… 7.Integrated Property 8.Go-BPO… 9.First American Residential Value 10.Lenders Financial 11.Single Source Property 12.Imortgage


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