Don t Be A Victim Of A Drive By BPO
Below is a MRR and PLR article in category Finance -> subcategory Real Estate.
Avoid Falling Victim to a Drive-By BPO
Introduction
Memphis, TN, may be known for drive-by incidents, but today we're discussing a different kind of risk for real estate investors: the drive-by Broker Price Opinion (BPO). Having experienced this firsthand, we aim to help you avoid becoming a statistic.
Understanding BPOs
As Memphis real estate investors specializing in the pre-foreclosure market, we often deal with sellers who are heavily financed, leaving little room for deals. This leads us to negotiate short sales with lenders, who require a BPO to determine the fair market value.
A Broker's Price Opinion is typically conducted by a licensed real estate agent or broker to assess market value, particularly for foreclosures. Often, agents performing BPOs have a stake, as they might later list the property, which can lead to inflated appraisals.
The Risks of a Drive-By BPO
Drive-by BPOs involve a quick stop in front of a property to snap an exterior photo, neglecting the internal condition or necessary repairs. This can result in misleading valuations, especially for properties with hidden damage. We've had agents overlook major issues, like tarp-covered roof holes, simply because they didn’t inspect beyond the curb.
Ensuring an Accurate BPO
- Arrive Early: Be on the scene at least 45-60 minutes before the appointment.
- Build Rapport: Establish a connection with the appraiser and come prepared with photos and a repair list.
- Provide True Comparables: Research the neighborhood for realistic comparisons. If there’s a unique feature, such as a stucco exterior in a primarily brick neighborhood, share moisture test results if applicable.
Preventing Drive-By BPO Errors
- Be the Main Contact: Ensure the lender knows to contact you for the BPO appointment.
- Engage with the BPO Agent: If you spot a vehicle outside, promptly offer to show the interior.
- Help, Don’t Hound: Offer assistance but don’t be offended if the agent prefers independence.
- Highlight Flaws, Not Features: It’s your role to point out issues, driving down the valuation.
Provide the agent with printed copies of your findings, detailing each issue on colorful paper to catch their attention. Include the lowest comparables within a five-mile radius to support your case. Documenting these discrepancies can significantly impact your profit, potentially turning a $5,000 gain into $30,000.
In summary, being proactive and well-prepared can protect you from the pitfalls of a drive-by BPO, maximizing your investment returns.
You can find the original non-AI version of this article here: Don t Be A Victim Of A Drive By BPO.
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