A BPO and REO specialist can be a profitable niche, but it is hard work.
In the real estate agent's world, the REO is a job, while the BPO is tool. REO stands for "real estate owned," and is a term for a house that was taken back in foreclosure by the bank or lending institution. The bank, or its asset management company, generally puts it up for sale to the general public. For a real estate agent to gain the listing for this property, she needs to compile a Broker's Price Opinion, or BPO.
Instructions
1. Decide whether you have enough time to specialize in REOs. These transactions are time-consuming and require dealing with holdover tenants, lockouts, property maintenance duties, weekly property checks and more. One REO on your list probably won't present time conflicts. As a specialist, however, handling many properties with these requirements takes a lot of time away from other clients and your own family life.
2. Set aside money for services required to bring the properties to the market. These might include trash out, pool cleaning, landscape renovation and changing door locks. Many asset management companies require the agent to pay for these services and submit an invoice for reimbursement. REO expert Tom Di Mercurio suggests you set aside at least $600 per property.
3. Familiarize yourself with the REO selling process, which differs from the traditional real estate transaction. Your local Realtor's association might offer a course that outlines the REO process.
4. Register with banks and asset management companies to be considered as a listing agent for the REO properties. Several online databases allow agents to register, such as BPOAcess.com.
5. Advertise your availability online with the various websites created for this purpose. Some of these sites charge agents a fee, others, such as REOnetwork.com, do not.
6. Learn compile a winning BPO. A more detailed version of the comparative market analysis, most lenders require the BPO be filled out on their form. Ask other agents in your office who have compiled BPOs if you can look at the forms to get a feel for what is required.
7. Include unobstructed, detailed photographs with the BPO. Some lenders require a specific number of photos and specific views: from across the street, for instance. Read the photo requirements carefully.
