Yes there are two BPOs or sometimes a BPO and an appraisal. Then when someone purchases the property there is another appraisal which is done to protect the bank that is lending the money on the property.
Each REO agent has to report to the banks and according to what the banks requirements are they must keep the banks informed if the prices are changing in the area of the property, so there is new data that is given to them on a regular basis.
Usually when a BPO is ordered it can be ordered by a bank to some specific agents that they use for certain zip codes, but most banks use companies that have agents join their site, (many sites costing the agent money). The agent must provide information to that site many times by taking tests and providing their experience but sometimes it is as little as uploading their license, a copy of their E & O insurance and a W-9 form. The companies usually give out BPO to agents whoâ€™s office is less than 30 miles from the property.
The agents have to use the BPO site and its questions to input the information. Some BPO sites are more detailed than others. I know of I believe 75 sites. The agents get paid from $0.00 (with a promise to get REOs after so many BPO) to $180.00 depending on the company, the type and the complexity.
At first agents thought if they gave a high BPO that they would get the listing, now most of them realize that doesnâ€™t work and the banks want accurate BPOs. When an agent does a BPO if there is an area for commits that is where they can explain the market in a specific area. One done properly explains how many REOs are for sale, how many short sales and how many standard sales all of which dictates how the market for that type of home in a specific area might change. Time on market is also important to them, it gives them an idea of how long it could take for the banks to hold the property before it is sold.
The agents give them a repaired price, 30 day sale price and an as is price. (The bank compares the two BPOâ€™s and the bank determines the price it is listed for). It is important that the REO agent be accurate because he is held accountable if the property doesnâ€™t sell in a timely manner (according to his/her prodictions). One of the problems with REOs is the fact that new banks wonâ€™t lend on the homes that for instance donâ€™t have cabinets, a heating system, doors, cracked windows, etc. So the property is then listed very low (making an average buyer who is willing to do the work think they can pick up a great bargain only to find out that they cannot get a loan on the home because of the repairs that are needed), because a lender wont lend on that property, so it really only is available to a cash buyer or someone who knows how to do a 203k loan. So now they have companies that REO agent can call to get a price on repairs so that they can get a better determination on the cost of repairs.
Remember most banks determine their decisions on formulaâ€™s, so many days is one portion, a certain % of current market price is another and weather or not the market is going up or down. Oh one last thingâ€¦the agent must work for a broker (the broker us ultimately responsible for their work) thus the name Broker Price Opinion.
I hope this is helpful