Home > Blogs > Confessions of a BPO agent.
7,119 views

Marvin Von Renchler's Blog

By Marvin Von Renchler | Managing Broker in Tigard, OR

Confessions of a BPO agent.

Was just posting to another agent blog about this and thought it an interesting blog on its own.
Broker Price Opinons, or BPOs. What a SCAM!!

How many people are harmed by inaccurate BPOs? Why is this system flawed and in some cases should be outlawed?

Folks, I developed a way to break minto the BPO market for one reason. It was very misguided! I thought it would enable me to get REO listings. I went to a training school based in Arizona but after a short time got my money back. They preached half truths and outdated practices.

Truth is you only get REO from a FEW BPO sources and you usually have to pay for membership and be a very well heeled individual who can pay OUT OF POCKET to have the properties cleaned up, keep the electricity on, etc until you are paid back. So, after discovering all that I decided to do BPOS in a major way.

Wow what a mixed blessing. Im buried in work but its not like hitting the lottery. Ive completed over 1,700 BPOs and can now be a blind taxi driver in my county. Ive logged thousands of miles and spent a few thousand in gas. These things were paying very well a few years ago but as more and more agents beg for the business, the BPO portals smell blood and lower the pay because some agent, somewhere will always take a dollar.  Drive by BPOs now pay from about $30 to $55 if you are lucky. Corelogic just started a new bid system that causes the agents to drive down their own pay and Corelogic makes the extra profit! Interior BPOs will pay from approx $50 to as much as $85 with a few portals.

Now then---why do I call this a SCAM?  I have to butt heads all the time with various quality control people within the portals. Many of them are staffed by service people with a minimal understanding of the appraisal process. They have a 'fill in the blanks' form. If one wanders outside guidelines, it constipates the staff! I had a mortgage company for years and have been trained in underwriting school with an emphasis on appraisals. Here are a few of the innacuracies that cause problems for the poor selers and even buyers:

Split level, or daylight ranch styles: Many portals only want you to count ABOVE GRADE GLA, or Gross Living Area. So you have a 2400 sq ft 2 level home that shws one level from the street but the land sloes to the rear and a complete lower level is there. Not a basement, mind you! The portal will make me comp it as a 1200 sq ft house when no other dwellings in the area exist at only 1200 feet.
How about driveby BPOs? You have zero idead whats inside. In parts of my county certain subdivisions were almost totally remodeled from about 1995 through 2006 or so. If I p-ull comps based on GLA. AGE. number of BRs, etc, I could be off by tens of thousands if the subject is a remodel and the comps are not or the other way around. 

Ive been asked to justify my findings many times, causing extra work for my measily $45.

I come in at $150,000 but the BPO agent befor me (they will sometimes pull up to 6 or so BPS throughout the proicess) came in at $110,000 or $200,000. I will be asked why I think Im accurate and the others are not.  I swear to you that after a time, I started emailing back 'Because the last BPO agent is an imbecile and shouldnt be licensed'. No one ver asked me to take that statement out of the finaol form before it was sent to the lender.

We are not supposed to talk to people at all. Same with regular appraisers but you will see seminars in the web that tell you to meet with the BPO agent and 'guide' them toward your perception of value.

I was speaking to a friend in foreclosure. As we stood in the front yard, a BPO agent came up to take pictures. My friend told him that the house is zoned commercial and financing isnt available. Also told him about the structural problems. The home had been worth $450,000 at one time but was at the time worth about $135,000.  He owed $190,000. As the BPO guy was leaving, he said "I'll bring it in as high as I can stretch it" then drove off. He was thinking that it was a goodthing to do for the owner but it wasnt. The BPO came in at $250,000 and the lender wouldnt modify, starting the process for judiciao foreclosure. The lender thought they had a lot of equity to gain at sale.

I BPO'd it for my friend just for info and it came in at a solid $119,000 for me with good comps. He tried to give that to the lender but they wouldnt budge and now he is facing the court date and will probably lose the house. 

Drive by BPOs should not be allowed. The home can be be beautiful and remodeled or it can be stripped out to nothing.

Some of the portals really do a great job and make you treat the BPO as almost a full appraisal. Other require so little info that its a joke.  BPO agents can trick their way through the process. Many have the attitude that its only $45 so why should they do much work?

Along with this is the sadness of walking through hundreds of homes that have kids coloring pictures on the walls, growth charts in the doorways, etc.



Comments

By Pacita Dimacali,  Wed Oct 12 2011, 19:18
One BPO agent called me, the listing agent, to take interior shots. He was from another county and couldn't make it to the property because it's more than 1 hour's drive away Then he asked me for information about the vicinity. He had no clue about market values.

Why, oh, why would the banks trust a BPO agent to come up with a value if the agent is totally clueless about the local markets, and worse, too lazy to check it out?
By Akil Walker,  Wed Oct 12 2011, 20:29
Marvin,

I just finished two tonight. I only do BPOs in my primary county.

i have seen one company sending out BPO bids for $20.

I was thinking of the justification piece you mentioned in the blog. This always kills me when you submit the recent comps of what has sold and what is currently listed, and they want further justification.
By Allan Erps,  Wed Oct 12 2011, 20:54
Fantastic post and great observation of a flawed system!
By Marvin Von Renchler,  Wed Oct 12 2011, 22:54
Akil, these $20 jobs are usually called MTRs and dont require you to drive by the property. Its all computer work. Doesnt sound so bad, eh? Just computer work for $20? Then their information isnt accurate, causing you to do extra comp work. You complete all the forms. They start to nit pick you to death over proximity, etc. You try to tell them that the distance guideline no longer is accurate for the area or the economy. That if they are anal and stick to 1/2 mile with heavily adjusted comps, they wont have the same sense of value as with exact comps at .6 mile! After being requested to do all the work three or even four times again over their OCD ish desires, its SOOOO not worth the twenty bucks.
By Annette Lawrence,  Thu Oct 13 2011, 06:13
Marvin, excellent post.
From your direct experience you have shared with everyone the importance of controlling the BPO process. Just like the appraiser from 200 miles away, you don't need to play dead when you see the home owner you are obligated to protect being set up for a tragic result. You don't need to allow unqualified people access to the home. YOU HAVE THAT RESPONSIBILITY.

The story you shared where the BPO agent stated, "I'll get you as much as I can" clearly reveals the issue. If you don't control the BPO, you are setting the stage for months and months of grief.
By Akil Walker,  Fri Oct 14 2011, 04:19
Marvin,

The orders I have sent to me require 2 pics of subject, street, etc. It is crazy. I did a few BPOs for this company when the reduced their orders to $45 and then they went to $20 for basically the same info. I thought no one would accept them but people the orders are normally taken quickly to my surprise.
By Marvin Von Renchler,  Sat Oct 15 2011, 12:54
Yes, so many brokers are starving that there is no lack of takers. The BPO companies smell the blood and have been lowering fees. I remember when BPOs though few and far between, were almost $100

The worst of the bunch is CORE LOGIC with the bid system As hungry newbies bid down the orders, those of us who do a lot of work instead of just 'making it work' will stop working for them. Corelogic gave me one that required a 30 mile trip ending in 3 miles of pitted, dirt road and a NO TRESPASSING SIGN on one of three possible dirt road entries. I could take all three to find house numbers. Corelogic finally helped me with a map I went out again (now 60 miles) and the correct dirt road had the no trespassing sign. We are told not to disobey those, so I came back and asked them what to do. After 3 attempts with no reply, they re-assigned the order. In a way it was a relief not to go another 30 miles, but I already lost 60, and the re-assignment greatly lowers your score. The lower the score, the fewer assignments you receive. Very unfair. When you have cookie cutter close in subjects its easy to comply with the turn time desired by the company. Usually 3 days and sometimes a rush for same or next day. This used to pay extra but many either dont now or give 5 bucks.

When you have 1959 garbage triplex in an area where only one was ever built in a ten mile radius, it aint easy to give a quick turn. Also, they want pictures so if you have to go to an internet site such as Redfin or Trulia for comps and those give no pics---you have to drive for the comp photos. I know brokers who just fake pics from old BPOS in the same area, etc. Another guy keeps a bunch of different style mailboxes on poles. If he doesnt want to drive to the subject to get the house number as proof he was there, he uses stick on numbers and places the faked box on a street with lots of bushes around it so the house cant bee seen in the background. Others take MLS or other net photos if available and then use a program to cut out the MLS copyright info placed in the picture.

There are some tricks one can use to get more orders from a BPO portal but I wont give them here. 2 years ago I used one trick on a Friday afternoon and found myself with FORTY orders needing completion by Monday AM. Wow was I happy. They paid $100 each from a Texas company as rush orders. I thought I could do them in time. WRONG!! Not only were they all problem properties taken from some out of business credit union that loaned on anything, the BPO companies forms were outrageous and very long. They required every field to have something in it, even if it was a NA or 0, etc. And they limited the number of letters in caps, etc. We had to start re doing all the forms and became buried alive. I completed only 18 of 40 and that company wants me drawn and quartered.

By the way, excuse my typos in the original post, as I had a finger in a cast.
By Bob Jakowinicz,  Sat Oct 15 2011, 12:59
Wow such a mess, glad I am not doing these if this is the case. Sounds like they can bid out the work and pick the lowest bidders (essentially). This may not always give the best reports and values in my opinion. When hundreds of thousands of dollars are involved it amazes me these companies worry so much about pennies when it can cost them much more than that will bad reports.
By Stephanie Leon PA 786-574-3928,  Sat Oct 15 2011, 13:42
Now that they reduced the price I myself have slowed down in taking BPO's... It takes time, gas, and knowledge of an area to complete a BPO the proper way... So we should be paid for our services rendered as a professional in the industry... Onetime I was chased down by a neighbor who got upset because I was taking pictures of the house next to his... And then the banks want to reduce our pay to $45... I don't think so...

If all agents stop taking BPO's then the banks will be forced to pay $350 for an appraisal..

Another thing Bpo's having to be ordered 2 or 3 times on a property is a side effect of them cutting our pay.. Like the saying goes " you get what you pay for"...

Great post....
By Marvin Von Renchler,  Sat Oct 15 2011, 14:17
Ahh dont get me started on WAR STORIES, lol. Ive been chased down, had an axe swung at me, had a guy try to drive his truck into mine, had 4 guys with dogs in a black suburban chase us for 5 miles out of 'their' woods, etc. And, once someone actually shot into a tree next to me. True. Some of my BPOs have been turned in with nothing but a picture of the owners hands on my glass trying to get into the car. They accepted them! Once we had an entire street of people come out of their homes to mob the street so we couldnt get to the end subject. It was in the woods near Portland and they all know and protect each other. We call it 'Deliverance Ville" I took it off my zip code list. Bottom line is with enough knowledge and a good system to do these quickly on the computers, $1500 to $2500 a month is very possible. Ive seen people make more and one guy make $10,000 a month by using photo helpers which took some pay out of his gross, of course.


SOmehting my wife and I appreciate is placing into your available to do list the zip codes of places you like to go for a breakfast, a weekend getaway drive, etc. You just wait until you get one to three in that area, then the BPO/s pay for gas to where you would have gone anyway. One company pays $55 each in an area about 22 miles from my office. The little town has a bakery we love. I wait until a few orders come in from that area then we go to the bakery and have gas and lunch paid for taking a few pictures. BPOs in that area are seldom complicated.

My favorite BPO portal of all is Clear Cap, followed by LRES. It used to be Corelogic (The old FARVV) There are some I wont work for at all, and a few others that are SO easy nothing is ever reviewed. Their forms have no place for adjustments! I feel sorry for the investors/banks using their info. I do my best on those to provide all the adjuetments in the comments section but some dont even have that. I could write a book about BPO work. I see internet courses sold by people making crazy claims about what you can make and how to do mit. They provide lists of BPO companies. They are all full of Bull Malarky.Their lists are not updated. Their methods no longer work, and they do not tell you what each BPO site requires and how to survive the companies quirks.

Stephanie, Ive seen properties that had five or six prior to mine. There are different reasons for ordering them. One can predict the amount of business we will get by knowing what triggers them and what stage the country happens to be in now. Long story.
By Ruth & Perry Mistry,  Sat Oct 15 2011, 14:58
Terrifi blog, too bad the Pay is so low per BPO.

Ruth

POST
 
Copyright © 2014 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer