The BPO Tutorial – Issue #1 “The BPO Effect”

This will be a tutorial for real estate agents concerning the possibility of making a side income from BPOs. This will be the first in a series of how to make money in real estate , or as I like to call it “Keep Your Job , Post Credit Crash”.

Before I start, I would like to say, YOU ARE NOT ALONE ! I don’t care how long you’ve been involved in real estate, what area you are located in , or how much money you made last year.

Let’s face it , there are many real estate agents who are feeling a major pinch from the 2008 credit crisis , and if that wasn’t bad enough, for many 2007 wasn’t a great year either. Many feel lost in the field of real estate, that once was a great career and is now slowly becoming a liability.

These statements ring true for the hundreds of real estate agents that have emailed me over the past year, some going into great detail of their losses.

For me on the other hand, 2008 was my best year yet , in fact I made no less than double my 2007 income, which was more my 2006 income (I’ve grown 292% since my first year in real estate).

The majority of that income has been from SELLING HOUSES , and not BPO Income, in fact only around 20% of my income comes from doing BPOs.

I can not emphasize how much selling houses is better than doing BPOs, but regardless ,you’re here to learn about BPOs, Right?

BPOs Stand for Broker Price Opinions

These BPO services are requested by a huge variety of banks , asset management companies, investors and other sources to determine the value of a property. In years gone by, banks would hire appraisers to do these services, but like all businesses, they wanted to make things cheaper.

Banks looked to real estate agents to do these valuations for them, I have done a good deal of research into this, and in the beginning they weren’t a whole lot cheaper than appraisals (About $150 for a Exterior and up to $250 for a interior).

Many times , the banks used the agents that did the BPOs to market and sell the property for them to the open market (Also known as REOs, Bank Owned, or Foreclosures) to the open market.

These orders were relatively easy for a agent to perform, and paid quite well (Around $100 a hour in a many situations). Banks couldn’t get enough agents to perform the BPO work for them as the number of foreclosures grew, so like any economy student can tell you that when demand for a product goes UP and the supply of the product is STABLE , the price tended to increase a bit.

Now that we’ve got the history of BPOs and brought you up to date with them , the next few sections will cover the topics of actually getting them.

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