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As a REO agent one of my main tasks is to complete Broker Price Opinions or BPOs. When I get a new REO assignment I have to complete a BPO and in some cases multiple BPOs on that property. I also complete paid BPOs on many properties that are not my listings. On paid BPOs most companies will pay between $40 and $80 per order. Completing a great BPO will help you get more REO listings and get you more business with paid BPO companies. It takes time to learn to complete a good BPO in a timely manner.
What is a Broker Price Opinion?
A BPO is a report compiled by a licensed real estate agent that is similar to an appraisal. A BPO is not an appraisal and appraisals can only be completed by licensed appraisers. In fact some states have made it illegal for real estate agents to complete BPOs, so always check with your state laws before completing BPOs.
Here is what will be needed for each BPO:
- Exterior or interior pictures depending on the type of BPO. Interior BPOs require the agent to inspect the interior of the property and usually pay more than exterior BPOs. Exterior BPOs require pictures of the property be taken from the street.
- Three comparable sold properties and three listed comparable properties. You will have to find comps that are similar to the subject property and enter data for those comps into the BPO form.
- Subject property data also has to be entered into the form which includes: square footage, room count, type of property, tax id numbers, location (rural, suburban, urban), condition and amenities (AC, deck, pool, etc)
- You will have to enter extensive comments on the BPO as well that describe the property you are valuing, the comparable properties, the neighborhood, the market and how you came up with you value.
- Many BPO forms require the agent to make adjustments to the comparable properties. If the subject has different features than the comparable properties you would adjust the sold or listed price of the comparable property like an appraiser would. If the subject has AC and the comp does not, you would have to add value to the comp property for it not having AC.
- Some companies also require the agent to upload MLS sheets or public records information to confirm the information the agent entered was correct.
How long does it take to complete a BPO?
When I complete BPOs I can finish the report in about 20 to 30 minutes and that includes pulling comps and entering data. I have done thousands of BPOs and I am much faster than most people who are just starting out. At this point in my real estate career I have my assistants complete the BPOs and they have gotten as fast as me. When they first started to complete BPOs it would take them over an hour in many cases to complete the report.
As my team did more and more BPOs they got faster and faster completing the reports. They learned to pull comp data quicker, enter data quicker and write comments quicker. If you are getting paid $50 a BPO and it takes you two hours to complete, it may not be worth your time, because you have to drive to the property and inspect it as well. If you can complete the report in 30 minutes or less and you are getting a lot of orders, you can make a good living completing BPOs.
Driving to complete inspections on BPOs can take up a lot of time. If you are getting one or two orders a week and the properties are 20 miles away that is a lot of time and gas. You have to make sure you are considering the drive time when you accept BPOs. I would not accept orders over 30 minutes away unless the BPO company would agree to pay more or I had multiple orders in the same area. When I started getting a lot of orders I would wait a day or two to complete pictures so that I could drive by as many properties as I could in one trip to save time.
If you get a new REO assignment and have to complete a BPO, I would go to the property as soon as possible and complete the BPO as soon as possible.
How much do you get paid for BPOs?
Most clients will pay about $50 for an exterior BPO and about $75 for an interior BPO. Some companies pay less and some pay more. The prices for BPOs has gone down over the last few years as BPO companies try to save time and money. Some companies pay as little as $30 for an exterior order. I will not accept any orders that are less than $40 and those orders have to be very close to me. For interior orders I have to get at least $70 for it to be worth our time.
In some cases the properties will be in very rural areas and the BPO companies will be willing to negotiate. I have been paid $150 for orders before that were an hour away from me. For me to drive that far, it is not worth $150, but in some cases the BPO companies will let you hire a runner to take pictures for you. If you are doing interior inspections you have to be a licensed agent.
How much can you make completing Broker Price Opinions?
Making $50 a couple of times a week does not add up very fast, but you can complete a lot of orders when you get used to the work. One year I completed over 1,000 BPO orders and grossed close to $50,000 just from BPOs alone. I was not doing BPOs full-time, I also was listing and selling REOs. The BPO income was a bonus on top of the income I was making from the REOs. You probably won’t be able to complete 1,000 BPOs in your first year doing them. It takes time to build up business, find clients and prove you can do a good job. But, getting BPO business is much easier than getting REO listings. Completing BPOs and good BPOs can lead to REO listings.
How can completing BPOs lead to REO listings?
On every REO listing an agent receives they must complete a BPO. They do not get paid for doing the BPO, because it is considered part of the job of listing the property. Many companies and banks that have REO listings, also use agents to complete BPOs not associated with REO listings. If you do an awesome job completing BPOs for a company, you will have the best shot of selling REOs for them if they need an agent in your area.
When you complete BPOs for companies that only do BPOs and do not have REO listings you still are helping yourself. Your name is on each BPO you complete and that BPO eventually makes its way to the owner of the property. There is a pretty small chance the owner of the property whether it is a bank, hedge fund, or the government will use the agent just because they completed a BPO, but it had happened. Getting your name out there as much as possible is one of the best ways to get REO clients.
One of the biggest challenges for agents to get REO business, is the banks and asset management companies want to use experiences REO agents. If you have never listed a REO property it is hard to get any REO listings. If you can’t get any REO listings, it is very tough to get experience. If you complete BPOs, that shows you are in the REO industry and gives you a much better chance of getting REOs, than if you have no experience at all.
How to find REO and BPO companies
If you are looking to get into the REO or BPO business, I created a kit to help you get more business. The REO and BPO Starter Kit is for agents who are looking to start doing REOs or BPOs or agents looking to increase business. The kit comes with video training, a detailed guide on how to get REOs and a list of companies to sign up with. I just added a brand new guide that shows you exactly how to complete an awesome BPO, which is included.