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Presented by James A. BrowningMRE,CEC,FSP,CREO
Masters in Real Estate Certified Commercial Education Broker/Owner Browning Group LLC Liquidated 130+M REO
Properties/last 3 years 25 years of Commercial Real Estate
ExperienceCommercial Director for CB NRT-
17yrs National Trainer/CREOBACEO/The REO Institute of Colorado
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Market Trends
2009-2010 over 6 million homes were foreclosed
Delinquent loans are at 10%
2009-2010 there were 175 bank closures
Over 800 banks are listed as “in trouble”
Unemployment – National and State
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REO
Over 5 million properties on the market
This number will increase- Shadow Market
75% of the sales are Short Sales or REOs
4th Qtr 2010 = 1 in every 397 homes in some stage of foreclosure
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Reality Bytes
Every 13 seconds, a new foreclosure starts
Estimated- 9 million new foreclosures by the end of 2012
Over 60% of modified loans are in default
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Class Overview
•The foundation of REO (Real Estate Owned) is the BPO Process (Broker Price Opinion).
•The first step is understanding what the purpose of a BPO is, who uses it, why and when.
•The next step is the perfecting of the BPO process; without this process there will not be repeat
business.
•To be a qualified BPO professional, one must always be concise, accurate, and complete the BPO
in its entirety.
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Why do BPOs? Receive more income
Increase your skillsBecome more proficient
Daily business marketingListing opportunities
Performing BPOs makes you a superior Real Estate Professional
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BPO=Broker Price Opinion
This is a method used to estimate the probable selling price of a
real estate asset.
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This method of estimating a price for the asset has similarities to a Comparable
Market Analysis – CMA.
These BPOs are specifically assigned to a broker from an outsourcer, lender, or
BPO company.
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Either a division of a financial institution or a stand alone company
Middle man between the broker and the banks/lenders
The outsourcer assigns the BPO to the brokerQuality control, and submitting to the bank
Outsourcer or BPO Company
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Who can perform a BPO?Realtors, brokers, sales agents,
appraisers (acting in an agent capacity), and active licensee's
Approved by employing/designated broker
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What purpose does a BPO serve, and when is it
requested?Request is made for the broker to complete a BPO
for a fee, or for the listing
Could be made at the 1st delinquency
Could be made for the bank to make a financial decision on an asset
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BPOs are requested for
Foreclosures REOsShort Sales HELOC's
And due diligence for investors or banks
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Exterior BPO:1st request
Exterior inspection and photos
Interior BPO:Requested when property is accessible
Schedule a showing, or once REO
Photos and Fees vary, this will be discussed later.
What is the difference between an interior and
exterior BPO?
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Real Estate Owned
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Properties that have gone through foreclosure
Properties revert back to the lender, mortgage company, or bank
What is a REO Property?
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Banks do not want to own these properties.
Lose more money on property ownership than on lending money.
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Who can perform REOs?
Active LicenseE&O Insurance- amount required by clients
3-5 years REO experienceREO Education, Designations
Service Area- zip code3-5 References
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What is an Outsourcer?Consider this the client
Division of financial institutionStand alone company
Asset Management Co.
Assignment through sale“Mark to Market, Cradle to Grave”
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Expectations:Responsibilities and accountability
Complete tasks on time
Follow directions- they will not hold your hand
Accuracy in pricing
Monthly Marketing Reports, updated BPOs
Property preservation knowledge and vendors
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Challenges of becoming a REO broker.
Negatives- only you can decide!
More workMore responsibility
More paperworkLower commission
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Positives!
Good= steady stream of listingsNon-emotional sale
Knowledge = RoutineLower commissions- more closings!
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How to work with Asset Managers?
1)Be an expert in your service area.
1)Understand their work load!Average AM portfolio = 200-400 properties
3)Communicate via email
4)Take initiative!
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Haunted REO Property with 5 Major Issues