As a real estate agent, your business may be affected by the current economic downturn. Your listings are no longer selling and your buyers are taking forever to make purchasing decisions. In the meantime, you still have to pay office expenses, broker fees, MLS subscriptions, alimony, etc. In this article I will discuss how you can earn additional income with your real estate license in addition to selling houses. Specifically, I am referring to carrying out Broker Price Opinions (BPO) for banks. I will also reveal a technique that I personally use to get those BPO orders in before other agents.
BPOs are basically mini Comparative Market Analysis (CMA). Banks order BPOs every time they want to know the value of properties. This could happen on many occasions; For example, the owner might be applying for a refinance, or the owner might be in default, or the property might be in foreclosure or in need of a short sale. There is currently a high demand for these BPO orders due to the foreclosure crisis. Since banks require BPOs to be performed by licensed real estate professionals, you can put your hard-earned license to good use.
There are two types of BPOs. An exterior BPO does not require you to enter the property and typically pays $40-$50. An interior BPO requires imaging of the interior of the property and typically pays $60-$90. Granted, you don’t make much on each BPO order, but keep in mind that a BPO can be completed in less than an hour or so. Just do 3-5 BPOs a week to help pay your basic expenses.
“Where do I find BPO orders?”
Although BPO orders are done by banks, contacting banks directly would be a waste of time as most banks don’t handle them directly. Instead, they apply for BPO through asset management companies. A quick way to find these companies is to Google “bpo asset management companies.” During your search, you will come across some companies that are really just directories. They usually require you to pay a fee to be listed as a BPO agent. They claim by listing in their directories that asset managers will find it. I’ve never had any luck with them so my advice is to save your money.
Once you find these companies, simply log into their website and register as a “supplier”. You will be required to complete an online application with your information. Most businesses will require a copy of your real estate license, your E&O insurance information, a W-9 form, and a list of zip codes or city names for the area you covered. Once you’re signed up, you’ll start receiving emails whenever a BPO order is available. To maximize your chances of getting orders, you should try to sign up with as many companies as possible. I personally have registered with 15 companies and I know that some agents have registered with more than 50 companies.
One thing you should pay attention to is that some of these asset management companies are called “BPO shops” where they only handle BPO orders. Clear Capital is a well-known example of such a company. On the other hand, some companies can also handle REO properties for banks. If you do a good job with your BPOs for these companies, you will have an opportunity to get REO listings. Some companies, such as Integrated Asset Services, will give you the list of the property you did a BPO on if that property ever becomes an REO. So, if your goal is to eventually become an REO agent (which it should be since listing REO properties is EXTREMELY lucrative), then you may want to avoid those BPO shops and focus only on companies that can provide you with REO listings.
“Okay. I signed up but I can’t get any orders from BPO! What should I do?”
So he started getting BPO request emails. He was excited, but when he responded to those requests he discovered that other agents had already taken the orders. What happened? Well, when most asset management companies send BPO requests, they send not just one agent, but all agents covering that particular city or zip code. Whoever responds to the email first receives the order. He may reply to his email as soon as he receives it, but his email program may only check the mail server every 30 minutes. Therefore, it might still be too late by the time he responds.
What can you do about it? Do you need to sit at your computer all day to answer emails? Here is my solution. I use a separate email address specifically for BPO orders. Then have all emails sent to this address forwarded to my cell phone email address as well. Most cell phone numbers have email addresses associated with them. For example, a Verizon Wireless cell phone would have an email address in the form of cell phone number @ vtext.com, where “cell phone number” is the phone number. You can contact your cell phone service provider for that information. Once it’s set up, whenever a BPO request comes in, I get a text on my cell right away. So I can reply to the email right away. I have been able to get over 90% of the BPOs since I implemented this technique.
You now have enough information to enter the BPO industry and the knowledge to beat the competition. Start earning extra money from those BPO orders when your regular business is slow and you may even get hundreds of REO listings in the near future.
