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

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

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

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

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.

Why do BPOs? Receive more income

Increase your skillsBecome more proficient

Daily business marketingListing opportunities

Performing BPOs makes you a superior Real Estate Professional

BPO=Broker Price Opinion

This is a method used to estimate the probable selling price of a

real estate asset.

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.

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

Who can perform a BPO?Realtors, brokers, sales agents,

appraisers (acting in an agent capacity), and active licensee's

Approved by employing/designated broker

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

BPOs are requested for

Foreclosures REOsShort Sales HELOC's

And due diligence for investors or banks

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?

Real Estate Owned

Properties that have gone through foreclosure

Properties revert back to the lender, mortgage company, or bank

What is a REO Property?

Banks do not want to own these properties.

Lose more money on property ownership than on lending money.

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

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”

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

Challenges of becoming a REO broker.

Negatives- only you can decide!

More workMore responsibility

More paperworkLower commission

Positives!

Good= steady stream of listingsNon-emotional sale

Knowledge = RoutineLower commissions- more closings!

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!

Haunted REO Property with 5 Major Issues