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To BPO or Not to BPO: That is The Question

bpo, real estate agentAs I journey through the learning curve on short sales, REO listings and all other things bank owned, I have entered the world of the BPO.

A BPO, broker price opinion, is a market analysis for a commercial institution, usually a lender. Very often, but not always, the BPO subject is in danger of foreclosure.

Usually the BPO is a drive-by which requires a photo of the front of the house, an address verification photo and a shot of the street view. These pictures are attached to a report that typically involves 3 comparable listings and 3 comparable sales in the area. There is no set fee for this service, but in my experience the range of pay is $35-60.

Sometimes the company will need a full interior BPO, which requires making an appointment with either the homeowner or the caretaker of the property….not an easy task under most circumstances. I have found the payment for these goes from $80-115.

Typically I do the drive-by BPO’s which can be turned around fairly quickly (house is in my target market, etc). Most often I am able to quickly obtain the photos I need without being seen. Sometimes, however, there is a very awkward conversation as the homeowner inquires why I am taking pictures of their home.

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I am never comfortable with this because the truthful answer, “I was assigned by a company to take pictures as part of a report to gauge the value of this property”, sounds vague. They always ask me for more information, which I really do not have. The institutions do not share with me why they are requesting this report.

Through the course of the last year I have gone back and forth with the return of investment (my time) for these BPO’s. Just as I got really involved the government stopped the foreclosure process for homes…only over the last few weeks have the BPO orders started back on the increase. I have yet to get a listing from my efforts, which was the main reason I started doing the reports.

I am interested in hearing from others with experience in BPO’s. Please take the very brief poll below:

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Written By

Lesley offers 21 years experience in real estate, public speaking and training. Lesley has a degree in communications and was the recipient of an international award for coordinating media in real estate. In the course of her career Lesley has presented at international real estate conferences and state REALTOR associations, hosted a real estate television program, written articles for trade magazines and created marketing and PR plans for many individuals, companies and non-profits.



  1. Joe Loomer

    August 21, 2009 at 7:30 am

    Lesley – I spent a good deal of wasted energy on BPO’s as the market was tanking in late 2007. Result? Listed one crack house at 24K which sold for 17K. I had three deputy sheriffs accompany me to take the interior photos – thanks to some useful sponsorship opportunity I took advantage of.

    My wife used to do one-two a month back in the day (pre ’06). We never realized a true return on the investment.

    With gas averaging $2.45 a gallon, it’s a waste of time now.

    Navy Chief, Navy Pride

  2. Missy Caulk

    August 21, 2009 at 9:00 am

    Lesley, one of my team members does BPO’s. She made about 7K last year. Personally they are not for me. But, she likes and needs the extra income.
    She has not received any listings from it in the past 2 years.
    In this market we do what we need to do.

  3. Lesley Lambert

    August 21, 2009 at 4:43 pm

    Joe, I hear that a lot. I wonder how it is that some people break through and get a ton of REO biz and others (like me) can’t seem to break in at all?

    Missy, I started them during a very slow period in the winter to help augment my income: I get it!

  4. Matthew Rathbun

    August 21, 2009 at 6:07 pm


    This is a great question. I suppose there are a few questions that I would ask myself if faced with doing them again (I no longer do them because I think the risk is too high for me personally)

    1. Will doing a BPO take away from my marketing time needed to keep the funnel full of serious consumers, that may have a far higher return than this BPO?

    2. Does my E and O Insurance cover me for doing them?

    3. If I were to take my projected income for the year, divided by 2050 (number of work hours in a year based on 40 hour weeks) would the number of hours it takes to do a BPO be profitable? Example: Let’s say that I get paid $75 to do a BPO and it takes 2 hours (travel time and PC time to submit). If I wish to make $100,000 a year, that means my time is worth roughly $49 an hour. Already I’m in the hole and I haven’t include the cost of technology to handle submissions, gas, vehicle use etc…

    4. Am I adequately trained to perform the requirements of the BPO? Typically they ask for what repairs are necessary and if repaired what would be the return of value. I’ve taught lots of GRI, Pre-Licensing and about 40 other topics. I don’t remember one of those curriculum ever teaching that information – save Appraisal training.

    5. Do I have a resource to substantiate my suggested values of the property?

    6. What is my Broker’s policy?

    7. What is State Law?

    8. What recent case law exists in my state regarding agents doing BPO’s?

    9. Will doing the BPO for the Loss Mitigation Officer potentially yield a contract to do REO listings? Will this relationship be profitable for more than just the cost of the BPO?

  5. Ken Brand

    August 21, 2009 at 6:35 pm

    IF things are tight, doing BPO can put food on the table. If you do them, go in knowing you’re doing it for the fast paycheck and the service you deliver, if you get a listing, that’s a bonus. I think doing them in hopes of getting listings is setting yourself up for disappointment and your time developing business can be better spent in other areas.

  6. Diane Guercio

    August 21, 2009 at 7:32 pm

    I used to do several BPOs a week, and did end up picking up several listings from it. Most of my business at the time was REO. In addition to being signed up with the BPO companies, I was signed up on REOtrans, and had several Clear Capital BPOs that were done for Wilshire turn into listings.

    Was it worth my time? Would my time have been better spent getting traditional resale listings? I don’t know- if you study the stats, most of what was selling was in the REO price category in our area.

    Of course, when the Mass Land Court decision went into effect, it all became moot.

  7. Joe Dallorso

    August 22, 2009 at 8:23 am

    I did about 125 BPO’s in 2008. I quit because I never got a listing, they took too much time for the money and the BPO company was always calling me about deadlines like I was an irresponsible child.

    I do think BPO’s made me a better Realtor. I’m in a market where 42% of sales are REO or SS. BPO’s really drive home what houses are really selling for and what it really takes to sell a house in 30-90 days. The guidelines used by companies like First American & Core Logic make me feel like I can put a value on just about any property.

  8. Paula Henry

    August 22, 2009 at 9:01 pm

    What I make doing a BPO is time and dollars better spent on marketing and servicing my clients. Not my cup of tea!

  9. Jason Sandquist

    August 22, 2009 at 10:48 pm

    I use to do BPO’s as well in hopes of getting some listings. Then I realized I was doing all the BPO’s for listings being taken by the craptacular agent who never had time to respond to offers in the first place, so I walked.

    They paid pennies… Joe’s right, to much time and no return from some, not all.

    @Diane – funny one of the companies I signed up for was REOtrans and never got one.

    Also hate those BPO companies that do an email blast and the first one that responds gets it. Not a very good way to do business IMO >>> one of those companies is mark to market

  10. Fedric Lewis

    August 24, 2009 at 4:24 pm

    Hi…The concept of BPO companies is getting popular these days with the cost and time considerations. The outsourced work is being done at reasonable rates in a stipulated time. So its one of the fast growing industries today and a logical sequence of globalizing the IT market.

  11. Matt Wilkins

    August 27, 2009 at 12:28 am

    I know I’m going to be the odd man out here but I’ve been doing BPOs since November 2006 and now consistently do 100-150+ per month.

    Like anything else you have to have a system in place. I am very selective about the areas I service and plan routes for orders in my queue to make the most efficient use of time and gas many times molding BPO routes around my schedule. I’m also chooosy about the companies I work for based on criteria I set.

    Have I gotten a listing rom one… No. However I’m not sure if I want to from seeing what the listers in my area have to go through.

    My take on it: It is a nice way to earn a base income by staying immersed in the local market while still allowing time to work with a client base without feeling the need to push them into a sale.

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