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
Experience
Commercial Director for CB NRT-17yrs
National Trainer/CREOBA
CEO/The REO Institute of Colorado
Presented by James A. Browning
MRE,CEC,FSP,CREO
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


This number will increase- Shadow Market


Over 5 million properties on the 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
•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.
Class Overview
Why do BPOs?
Receive more income
 Increase your skills
 Become more proficient
 Daily business marketing
 Listing 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.

Outsourcer 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 broker
Quality control, and submitting to the bank
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
Short Sales
REOs
HELOC's
And due diligence for investors or
banks
What is the difference between an
interior and exterior BPO?
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.
Real Estate Owned
What is a REO Property?


Properties that have gone through
foreclosure
Properties revert back to the lender,
mortgage company, or bank

Banks do not want to own these properties.

Lose more money on property ownership
than on lending money.
Who can perform REOs?


Active License
E&O Insurance- amount required by clients


3-5 years REO experience
REO Education, Designations

Service Area- zip code

3-5 References
What is an Outsourcer?
Consider this the client
Division of financial institution
Stand 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 work
More responsibility
More paperwork
Lower commission

Good= steady stream of listings
Non-emotional sale
Knowledge = Routine
Lower commissions- more closings!

Positives!
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