What they didn't teach you at BPO Bootcamp

1. What They Don’t
Teach You at BPOTeach You at BPO
Bootcampp
Learn the inside secrets on
performing impressive
evaluations

2. I thi iIn 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

3. M B iMore Business
 Offer Free 2nd Opinion BPO
To AMs you would like to work withTo AMs you would like to work with
To AMs you currently work with
Tell them to tell other AMs in the deptTell them to tell other AMs in the dept
K k th i k ff ith S BPO Knock their socks off with a Super BPO

4. St i BPOStepping 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 thingsthe closest shopping is 5.3 miles away. Be specific about things
good or bad.
 Accurate Distance Accurate Distance
 Don’t just use ‘1 mile’ for all
 http://www.gpsvisualizer.com/calculators

5. St i BPOStepping up your BPO
 Quality Photos
 Full set of photos
 Shoot as wide angle as possible
 Good lighting Good lighting
 Include Bids on Recommended Repairs with your BPO
 Immediately differentiates you from other agents 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

6. Asset ManagersAsset Managers

7. I id SInside Scoop
 They have hundreds to
review
 You likely can get away
with shortcuts/errorswith shortcuts/errors
 Stay away from this
temptation, it will haunt
you later!

8. AMs closely look at
1. Suggested Prices vs. Comp. Prices
2. Your Summary Remarks2. Your Summary Remarks

9. I id SInside 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 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 valuesvaguely 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

10. I id SInside Scoop
 Remarks, Remarks,
Remarks
 If you are getting calls on If you are getting calls on
other items on the report,
you are most likely not
writing enough explanation
i th t tiin the comment section
 Anything that is out of the
norm, add an explanation

11. Investors, the Asset,
Manager’s Bossg

12. I id SInside Scoop
 Investors review the
report in greater
detail especially if thedetail, especially if the
property lingers on
the market
 They audit because
their money is on the
line!

13. I id SInside Scoop
 Will review tolerances
 “Why comp #2 has 2 beds and our subject has 4?”
W t d t il f i it ith bid t Want details of repair items with bids to cure
 (impress them with bids upfront)
 They will closely compare the original BPO to subsequent BPOs 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
f They will map comps for distance
 Make sure you don’t make up distances

14. I id SInside Scoop
 They will take offense
to off color remarks
Example:
“S bj t t i“Subject property is
located in an area with
high crime rates andg
gang activity.”

15. I id SInside Scoop
ALTERNATIVES:
 “This area is a much older
neighborhood compared to most. Most
home buyers are interested in newer
neighborhoods“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

16. Do’s and Don'tsDo s and Don ts

17. D ’Do’s
 Stay within general tolerances
Use comps within 10% of price of subjectUse comps within 10% of price of subject
Use comps within +/-10 yrs old
Use comps within 20% in living areaUse comps within 20% in living area
Use comps less than 3 months old if possible,
6 months max6 months max

18. D ’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 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

19. D ’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
M k dj t t i t t 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 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.

20. D ’tDon’ts
 Leave fields blank
Recycle your photos Every BPO should have a fresh set 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 streetp g p
 Recycle your comps on subsequent BPOs

21. D ’tDon’ts
 Guess on adjustments
 Guess on proximity
 Use generic or “canned” remarks
Be vague on repairs 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

22. Fine TuningFine Tuning

23. C l Mi t d Fi ldCommonly Miss-entered Fields
 Functional Utility
 ENTRY = Poor, Average, Good
NOT G El t i W t NOT Gas, Electric, Water
 Used to describe the functional use of the house
 i e 3/1 house is out of date 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

24. C l Mi t d Fi ldCommonly 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 il f R l 5 miles+ for Rural
 Site
 ENTRY = slopped, level etc
 NOT Good, Fair, Poor

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