1) how do I find out a homes Style?
2) What is the best way to describe The subject property? Best way to describe subject neighborhood?
3) And where do you get the stats or statistics of the neighborhood?
4) Should we use absorption rates? Is so can you give me an example on how you would write it out. 5) what are the BPO Companies that pay $50.00 & up for exterior BPO's.
I am in Los Angeles
Thank you everyone!!!
Replies
William, Each company has their own requirements for BPOs to some small extent. Basics are still basics and most have similar forms and requirements. Many forms are drop down as has been said. Many companies have a guide line in the letter of engagement sent with their orders that spells out a lot of what you need to know.
Begin by doing BPOs only in areas you are very familiar with. This will help with neighborhood descriptions and actual market knowledge you have with an area you are familiar with.
Your MLS also has information on the neighborhood data and statistics that can help. Taking an MLS class at your local board can be very helpful. You will be surprised at all the features , functions and information that are available on the MLS that really assist in doing accurate BPOs.
Using absorption rates are required in some BPOs . You can easily find these figures in your MLS in the market conditions report. If the company does not require them you can add them to additional comments to support you opinion of value if you want to.
The biggest thing to remember is do not do adjustments just to do them. Make sure you have market data to support them. If there is no market data to support a difference in market pricing relating to styles then don't adjust for that.. For example, there are as many buyers for a 2 story as there are for a ranch or other styles where I am at so there is no market data to support an adjustment for style in my area. Condition and amenities means more than style or even GLA at times. Do your research.
Make sure you do not adjust on what and item costs to build or add to a home. Your adjustment should only be on what a typical buyer will really pay for that item in that home. A good thing to remember is Matched Pair Analysis. If you had 2 homes exactly alike next door to each other and one had a I/2 bath more, (for an example ) what would the typical buyer in THAT neighborhood and THAT price range be willing to pay for that half bath? Remember every thing adds up in payment. Most buyers have an amount per month they can afford. If that half bath adds too much to the listing price that it pushes them over their comfort zone then most buyers will do with out it. The only way to know what a half bath or any amenity adds to the price is to do the research and use proven data to support the adjustment. Not all differences effect value. In fact many do not. Remember don't ever "PFA." Support all of your adjustments , conclusions and remarks with data researched from the market for the BPO you are doing..
Good luck!
Good post Barbara. Some of your advice is perfect in a market that has many comps but in a horrible market like ours, one must be creative. Few people even know about absorption rates but Ive only seen ONE company require anything to do with that for a BPO form in almost 5,000 bpo orders. You bring up a huge point about single vs multi level housing. In some areas of Portland, ranch style is preferred and will command higher prices. Problem is, unless you have had many 1 and 2 level homes sell in the same area withing an allowable time, you have NO WAY of computing the difference. Its easy if you have ten 1 levels all sell at $200,000 and ten 2 levels all sell at $220,000, all other features comparable. In a mrket like our with so terribly few comps of any kind, trying to cross level types and adjust is almost impossible. I stick to the level type and expand proximity until I get all equal comps, then possibly adjust for the location which is a lot easier. And as I said way above, though we want to be as accurate as possible (or we should do the danged job at all) its is only about $50 bucks. The lenders know it. The bpo portals know it, except for a few like FARVV that takes you to task for anything and everything that the crew from India doesnt see matching their check off list. Ive made life easier by adjusting for bathrrom count with a general cost approach, assuming it would have been built in on initial constuction. This takes into account the area quality of course. A 1/2 bath will cost more in a $500,000 area than a $100,000.
So usually I assign 1500 for a 1/2 bath. 2500 for a full, 5000 for a single vs double car, etc. It makes life easier and is never questioned by the QC people. who ONLY seem to want an explanation just to have one. Throw something in and they can see it then leave you alone. Of course dont throw something in that doesnt make sense just to do it.
If your one and two levels are the same GLA, features, lot size, age why would you value a two level higher?
Thank you Barara & and everyone for your advice as of right now I have completed 10 BPOs. After a complete each one it gets easier and easier thanks again
Hi William, I red a lot of replies, but my advise to you is to learn how to do BPO exterior/interior assignments, therefore there is a web site NABPOP.com. All your questions and concerns will be answered if you become a member of that site( Seriously I'm not advertizing them). I started doing BPO's since 2005, and I learned everything by that site. There is a fee to pay to become a member, but is worth it. They will proved you with the list of BPO companies, which ones are paying. One more thing, if the company is asking to pay some fee's do not sign up, check them in Google... Good Luck!!! :)
WooHoo!!!!
Hi William,
Fire your Broker and go to a large franchise get the proper training do you use the MLS have access to homes.....most of the time the description will be on an older listing of the property that would be in the history of the property. BPO's are not easy I have been doing them since 2009 the forms have changed accordingly. Not my full time job I am a fulltime Real Estate Broker in NJ for 25 years and you need a large franchise with training.
Sorry but I really disagree on this large franchise being the answer. Many times large companies are so over whelmed with the daily activity of the brokerage with so many agents that they have very little time for a good training program for an individual agent needing help in a specific area. Many times what happens is the newbee becomes and assistant to a veteran and becomes the go-for and learns through experience which takes a long time. Many small agencies have time and resources and want their agents to be fully trained and well rounded. Many take the time to give the extra help because they have the extra time since they have fewer agents. Neither large of small agencies can be claimed to be the better way. It all depends on the agency, the broker and the management team.
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