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Opinion Editorials

The evolution of the Broker Price Opinion – harsh words on industry changes

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The evolution of broker price opinions

Broker Price Opinions- I spend a good portion of the working week completing quite a few of them, just as many other Realtors do. Even before the passage of the Dodd-Frank Act, BPOs could not be used for new, purchase, government backed loans. What they were used for (and are still used for) is dropping PMI, determining price (please note: price opinion – hence the name BPO, not value, appraisers determine value, as real estate agents determine price) for REO listings, short sales, refinance mortgages, bankruptcy, note sales, divorces, relos, sheriff or auction sales, for insurance companies, loan modifications, and even for estates.

While the forms will vary based on the company, a BPO usually contains information on a subject, the very local sub-market, as well as listing and sales comparables. Whether due to pressure from those in government or throughout different aspects of the real estate and banking industry, BPOs are becoming less than a highly detailed CMA and more an appraisal-esque report. Companies are also requiring more education, higher E&O insurance, if not outright asking to be added onto the policy itself, and lowering contracted fees as well.

Certification alphabet soup

Whacked out changes have occurred across the board from a number of different banks, and outsourcing companies in the last few years, none of them really seem to mesh with one another, or make a ton of sense other than maybe the education thing. Preferential assignment of BPOs may not be the preferred terminology to use, however there has been a push to attain additional education, actually, certification from any number of groups, be it NAR’s newly introduced BPO Certification, the certification offered by The National Association of Broker Price Opinion Professionals, online courses offered by other loss mitigation companies, or continuing ed classes from anyone else out there.   

On at least a few instances, there have been requests to up E&O policies from a million bucks (probably the industry norm) to three million. For BPOs, and even tossing in REOs into the mix, it just isn’t cost effective to raise the limit for some real estate companies; including the fact that more than one agent is working this niche. The expense doesn’t justify the payout

The new industry bidding war

One notable company implemented the requirement of actually being added onto E&O policies a couple of years ago. This same company has recently started a bidding war between Realtors in regards to fees. Instead of an order being broadcast out to Realtors in a given area at say, $50, and the first one to accept, gets it. Now, Realtors can bid down or up in $0.50 increments, lowering their fee by $7.00, or raising it by a whopping $2.00 from the base price. There’s nothing like whoring oneself out in the name of getting business, right? Not when many of these companies are tightening their search parameters – try finding comps for a somewhat normal house, let alone an obscure one, within a third of a mile when it’s an urban area, on mile when suburban, or three miles in a rural area… seriously. 

Additionally, some companies now require driving by all comps and original comp photos to boot. Another company wants Realtors to upload a copy of tax records as part of the order. Let’s not forget my favorite new requirement of all- a complete sales history not only of the subject, but of all the comparables to boot. We also enjoy the companies who charge us for using whatever jacked up flavor of the month online platform they are so inclined to use, none of which are exactly user friendly. The fees go from one to two percent to a flat fee of $5 or $10… per ORDER.

BPOs & appraisals- speaking up for the industry

Allow me one brief second to speak both for the masses, and to quote myself, dude, if I wanted to do appraisals, I would have gotten a freaking appraisal license.  In some messed up way, many of these things are knee-jerk reactions to an equally messed up housing industry, and yeah probably some (albeit relatively few) scheming, shmuck, agent-types were out there falsifying or influencing BPOs. Newsflash- this is why we have real estate licensing laws and means of punishment for not following them. The sins of the father should not be revisited upon the son.

Katie Cosner, occasionally known as Kathleen, or KT, is a Realtor® with Cutler Real Estate and is active in her local Board of Realtors® on the Equal Opportunity & Professional Development Committee. She has been floating around online for a number of years, and is on facebook as well as twitter. While Katie has a few hardcore beliefs, three in the Real Estate World to live and die by are; education, ethics, and the law - insert random quote from “A Few Good Men” here. Katie is also an avid Cleveland Indians fan, which really explains quite a bit of her… quirks.

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3 Comments

3 Comments

  1. CJ

    September 26, 2011 at 8:46 am

    Could not agree with you more. One thing you did not mention is the manipulation of the BPO's by some vendors. They will tell you which comps you can use and which comps you can not use, make you adjust brackets and final evaluations, and even reject a comp that is right next door for another in a completely different neighborhood. What ever happened to location, location, location? What I have also found in doing over 100 BPO's a month is that some pay in a timely fashion but others take upwards of 60 days and are living on Broker/Agent floats. They get paid in 2 weeks and get $150 for the BPO you are providing for $35. One company recently went out of business owing BPO providers hundreds of thousands of dollars. I have been doing BPO's for over 20 years and with all these recent new developments I will probably fall by the wayside and let the hungry newbies who are desperate to work for $5 an hour take my place. Even Mickey D's and Wally World pay benefits for minimum wage. Guess what the quality of this new BPO product will be worth? That's right you ALWAYS get what you pay for and a BPO will be worthless at the rate this is going.

    • Jonathan Benya

      September 27, 2011 at 5:03 pm

      I think BPO's are already pretty worthless. I hate having to fight valuations on short sales because a BPO agent did a shoddy job, but it seems to happen all the time. You're right about the payment problems, too. I don't even know how much I have outstanding on BPO's owed to me right now, I just gave up on doing them completely.

  2. Kathleen Cosner

    September 27, 2011 at 5:08 am

    Hey CJ-
    I have had a company suggest what they thought was a more appropriate comp that they found on Zillow or someplace, if I had to go out of normal search parameters. Once it was explained why their comp was not good, they backed down, but have not seen this lately at all.

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Opinion Editorials

Uber CEO regrets saying that murder is part of business

(EDITORIAL) Uber CEO calls murder a mistake. Should society support a business that seems to think death is just part of the cost of doing business?

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Uber Pickup

On February 21, 2016, I woke up early to notifications about a shooting in Kalamazoo, Michigan. An Uber driver shot multiple individuals. Although I live in Oklahoma, the Facebook algorithms correctly deduced that this incident would be of interest to me. I have family and friends in Michigan, some in the Battle Creek area, just miles east of Kalamazoo. Later that morning, I learned that one of my friends had been killed in the incident.

Uber was criticized for the incident. Lawmakers across the country called for tougher background checks on Uber drivers. It was a PR nightmare for the company. Ultimately, it was the driver who was charged. Earlier this year, the driver pled guilty to all counts against him and was sentenced to life in prison. Uber continued operating, although then-Governor Rick Snyder did sign legislation that increased regulations for the ride-sharing industry.

I say this out of disclosure. This Uber tragedy affected me in a way that may cloud my opinion. I believe that Uber should be regulated more than it is. But recent events have made me question why society supports Uber and what I believe is a toxic culture.

How does Uber keep managing their corporate profile?

Uber seems to weather their PR crises fairly well. They’ve been criticized for inadequate background checks. Sexual harassment allegations at corporate headquarters shook up the management team. Uber has suffered data breaches. In 2018, the organization settled with the FTC for $148 million. Still, the company enjoys a market share of transportation services.

In 2018, Dara Khosrowshahi, former CEO of Expedia took over at Uber as its new CEO, replacing the CEO and founder Travis Kalanick. It was reported that Kalanick “led the company astray” from its moral center. Khosrowshahi said at the time, “In the end, the CEO of the company has to take responsibility.”

Just days ago, during an interview, Khosrowshahi said that “the assassination of journalist Jamal Khashoggi was a ‘mistake.’” It was a political murder. Khosrowshahi compared the assassination to a self-driving accident with an Uber vehicle that killed a pedestrian. It didn’t take long for Khosrowshahi to issue a retraction, saying that he “said something in the moment (he doesn’t) believe.”

Is Uber’s culture toxic?

Khosrowshahi says that his comment shouldn’t mark him as a person. He thinks that what he said was a “learning moment.” When a CEO misspeaks in an interview that isn’t just local, but international, maybe we should pay attention. According to him, murder isn’t a big deal. I wonder if he would say that if it was his father who died, or his friend who was killed by a driver.

When my friend died in the Kalamazoo shooting, I had to seriously think about how I viewed Uber. My friend wasn’t even using Uber at the time. She was getting into her own car at a local restaurant with some friends of hers. I recognize that Uber wasn’t responsible for the driver going on a shooting spree, but I have to wonder if it was Uber’s culture that led to a lack of response at the time.

Uber’s new CEO seems removed from how its services affect individuals and communities as its previous CEO did. When a company thinks that murder is a “mistake,” maybe it’s time to rethink about supporting a service that doesn’t seem to think about people, its employees, its drivers and its riders.

It may be more convenient than a cab, but it’s time to look at Uber’s real impact on society. I hear Uber saying that innocent deaths are just the cost of business. Is that the basis for a billion-dollar corporation?

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Opinion Editorials

Funny females are less likely to be promoted

(CAREER) Science says that the funnier a female, the less likely she is to be promoted. Uhh…

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funny females promoted less often

Faceless keyboard warriors around the world have been — incorrectly — lamenting that women just aren’t funny for years now (remember the “Ghostbusters” remake backlash?).The good news is they are obviously wrong. The bad news? When women dare to reveal their comedic side in the workplace they are often perceived as “disruptive” while men are rewarded.

That’s right. Women not only have to worry about being constantly interrupted, receiving raises less frequently than men despite asking for them equally as often, and still making nearly $10,000 less than men each year, but now they have to worry about being too funny at the office.

A recent University of Arizona study asked more than 300 people to read the fictional resume of a clothing store manager with the gender-neutral name “Sam” and watch a video presentation featuring Sam. The videos came in four versions: a serious male speaker, a humorous male speaker, a serious female speaker and a humorous female speaker.

According to the researchers, “humorous males are ascribed higher status compared with nonhumorous males, while humorous females are ascribed lower status compared with nonhumorous females.” Translation: Male workers earn respect for being funny while their funny female coworkers are often seen in a more negative light.

There are, of course, several reasons this could be the case. The researchers behind this particular study pointed to the stereotype that women are more dedicated to their families than their work, and being perceived as humorous could convey the sense they don’t take their work as seriously as men.

Psychiatrist Prudy Gourguechon offered another take, putting the blame directly on Sam the clothing store manager, calling out their seemingly narcissistic behavior and how society’s tolerance for such behavior is “distinctly gender-based.” She says these biases go back to the social programming of our childhoods and the roles mothers and fathers tend to play in our upbringing.

So what are women supposed to do with this information?

Gourgechon’s status quo advice includes telling women to not stop being funny, but “to be aware of the the feelings and subjectivities of the people around you.” While recommending an empathetic stance isn’t necessarily bad advice, it still puts the onus on women to change their behavior, worry about what everyone else thinks and attempt to please everyone around them.

We already know that professional women can have an extremely hard time remaining true to themselves in the workplace — especially women in the tech industry — and authenticity is often a privilege saved for those who conform to the accepted culture. We obviously still have a long way to go before women stop being “punished” for being funny at work, but things seem to be progressing, however slowly.

Former First Lady Michelle Obama shared her thoughts last year on the improvements that have been made and the changes that still need to happen, including encouraging men to step up and do their part. In the wake of the #metoo movement, CNBC recommended five things men can do to support women at work. There are amazing women in STEM positions around the world we can all admire and shine a spotlight on.

All of these steps — both big and small — will continue to chip away at the gender inequality that permeates today’s workplaces. And perhaps one day in the near future, female clothing store manager Sam will be allowed to be just as funny as male clothing store manager Sam.

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Opinion Editorials

To the unsung entrepreneurial heroes – we believe in you

(EDITORIAL) To the unseen entrepreneur we see you and we know that you work your tails off to do good things in your community even if it never means going IPO.

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restaurant entrepreneurs

I recently frequented one of my favorite new restaurants to find it permanently closed after less than a year. This locally sourced brunch place had pinpointed all of the farms that supplied their food on a map of California that hung like gallery art in the center of their restaurant.

They made sandwiches at their shop with donated food for the homeless and wrote inspirational notes to tuck inside their brown bag lunches. Their food was not only nutritious but delicious, and they seemed to always have patrons when we went, not too many that there was a line out the door, but enough that they always seemed busy.

I wish that we had spent more time there, more money, told more of our friends or left glowing yelp reviews, but we are only two people, two people who took a delicious restaurant for granted because we thought how could this fail?

I’m sure that’s what the owners believed too when they started out.

They probably thought they’d make great food that people want to eat in a location newly dubbed Silicon Beach – amid shiny live/work complexes, surrounded by startups and young people.

They ventured that they could morally source nutritious food, give back to the community, and be excellent.

Part of me imagines that they did so well as a restaurant that they shut their doors just to expand, or open in a better location, or take a much needed break. But they probably failed, like so many businesses do, and I want to take a moment to say thanks.

Not just to the restaurant that served the best breakfast tater tots that I have ever had the pleasure of eating, but to every entrepreneur who embarks on a journey that tries to make the world better.

I’m not just talking about the tech entrepreneurs, though we need you too.

I’m mostly talking about the unseen baker that wakes up at 3am every morning just to bring a handful of baked goods to their city. Or about the small store owner that stocks chotchkies and cookbooks and beautiful things all of which I wish I could buy. I’m talking about the start up plumber who shows up to your house on a Sunday afternoon and fixes your toilet because you’re at your wits end.

You are the unsung entrepreneurs, the heroes that we hurriedly thank on our way out the door.

You are the folks who had a dream and risked everything to bring us delicious food, adorable chotchkies, and functional plumbing.

A mentor of mine once told me that to be successful you must jump in the water, swim as fast as you can, and slowly increase the speed.

To those of you out there swimming as fast as you can – we’re behind you, and we appreciate you.

This is your headline, one you don’t often get — keep doing what you’re doing, we believe in you, and your hard work does not go unnoticed.

And if you decide after everything you’ve been through that it’s time to hang a permanently closed sign on your front door, there are people out there, lots of them maybe, who will mourn the loss of your mini quiches, your adorable iPhone cases, or even the best breakfast tater tots in the world.

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