Do you ever suspect the second opinion BPO agent of...

...purposefully inflating the price?


...purposefully DEflating the price?

Absolutely. I have a listing right now that is still overpriced by $50,000 after two price reductions. The AM got two back-up bpo’s from Clear Capital. My listing is a single family detached property in fair condition. The first guy used waterfront condo comps in a guard gated project. The only similarity between the subject and his comps was the square footage. I pointed this out to the AM after she sent me the comps that he used. So…she ordered another bpo from Clear Capital. This agent must have come in high as well as the property was listed $100,000 over my bpo.

Now, its two months down the road and the property is being actively shown. I have received one offer that came in at my bpo value but it was rejected. I have 30 more days under my listing and the property will be reassigned if it doesn’t sell which is the policy with this company.

The reason I asked is that one BPO agent in my area seems to consistently be involved when the list prices are too high. Of course, I don't know for sure if his price is what throws off the value--but he seems to be the common denominator. I don't know his value, but I know he is doing the second BPO when he calls for access.

At first, I thought that he just did not understand the realities of selling REO, but then he started to get a few REO listings himself. Now, I wonder if he is trying to be sure everybody else's listings are too high?

I am suspicious because of an earlier incident that involved him. He was doing a BPO on a pre-list of mine and was there at the same time as the appraiser. They discussed the house at length (the appraiser told me). Prior to listing the property, the AM called me to tell me that BOTH of the other values had come in $50k BELOW my value. She wanted to know why I was so high. I told her right out that I suspected there had been some collusion and urged her to list it at my HIGHER price. She did and it went under contract almost immediately.

The first offer I received on that property was $50k below the listed price (exactly what the AM had told me the other agent's value was), and it was written by the second opinion agent for a friend of the appraiser's.

Seems to me that if the agent would under-value a property for a specfic reason, he might also over-value a property to try to hurt other REO agents. Obviously, though, he cannot always influence an appraiser. At best, an over-valued BPO could only affect the listed price when the appraisal is also high.

...just a thought... I just wanted to know if any others out there suspect other agents of playing games...

Wow LizL, how do you get the appraiser and the 2nd opinion BPO agent to come to the house at the same time? I've never had this happen to me while doing a 2nd opinion BPO.

Now, I'm sure that there are bad apples just like in any other profession and it looks like some back room agreement took place in your $50K transaction above. However, I do think that some agents consistently come in high while others consistently come in low.

I assume that they both got the order at the same time and just happened to be there on the same day. Actually, I've run into appraisers in my own pre-lists twice now.

I am sure it happens from time to time.

I work in a rural/small town market with its own MLS. We have issues both with agents completing secondary BPO's not understanding the REO process, who overvalue in hopes of getting the listing, and other agents who undervalue for communities they don't like. We also wrestle with agents from nearby MLS's completing BPO's without access to all comps, skewing their valuation. It drives me insane!

I have been attempting to get a short sale to go through. When the first BPO was done, the 1st bank contact wouldn't tell me the values. Weeks and weeks later, I get a new bank contact who told me those values were $155k, $171k, and $176. I asked him what planet that agent came from. I believe the home has a value between $100k-$110k b/c of its condition (no owner-occupied will ever buy this property). Bank contact had another BPO done and this time he wouldn't tell me what the values were, but he suggested dropping the price $25k (which is still not enough). But, in my opinion, having heard those high figures, I truly believe the first agent was hoping to get the listing if or when the property goes into foreclosure.

I feel for superbroker's territory. I think these smaller MLS's need to merge - far better for seller and buyer clients.

I agree. Agents who do not have much experience with REO often come in high. Even when they assess the condition correctly, they do not account for the stigma and low-ball attitude that goes with an REO listing.

There is one REO listing agent in my area whose properties consistently go under contract in the first week, often in the first two days. I don't think her values are high enough, at least not on her own pre-lists.

I've seen some reports from established REO agents that make me scratch me head and say "huh?" As in, I did a BPO on an old house that is admittedly in pretty poor condition, but it is located in a rural area on 23 acres. Other agent comped it to an REO on .1 acre or less in an urban area and said it was worth 15K. The land alone is worth at least that much, and I said so for a clarification. Same agent did it again for another rural property, this one on about an acre...house in good condition...on a pretty tree-lined road. Other agent went clear into the next county, about 30 miles, to locate an urban REO comp in a scuz area. I came in higher again. So, yeah, these agents can get an offer in a week or less if they list as low as they'd like. In my opinion, they are leaving money on the table...sometimes a lot of money on the table.

There are two things going on here. Agents who don't know what they are doing - surprise and agents who think that they will get the listing if they value it higher. Lizl - I agree - there are agents out there doing BPOs with a specific buyer in mind - your appraiser and BPO agent cooked up a scheme to get "a good deal". You are very lucky that your AM calls you, and asks for your opinion. There are other AMs out there that will just list at the higher price. I have had listings way over priced, that I knew were going to be taken from me in a certain time frame cuz they didn't sell. I have e-mailed these AMs and sometimes called them using my BPO as my backup. It works more times then not, in 7 years I have only had 2 listings re-assigned because of price. I have also had luck calling the AM when I get an offer that matches my BPO - I had a listing at $120 that was in such poor condition it was worth $80. I called the AM, she reviewed the BPO, put me on hold, CALLED THE AGENT THAT DID THE BPO (I almost fainted) and found out - he had never entered the property. This house had tons of water damage due to frozen pipes but was in a neighborhood that would carry his price without the damage. She took the offer on the spot. The kicker - it was an Ocwen listing - and it just goes to show - stick to your guns - call and e-mail your AMs and see what happens. They have 400 to 600 files on their desk at any given time - and if you help them sell one, they are more then happy to work with you. It is best to have an offer on the table before you argue price, but in the case of one that is way over priced, call the AM way before it is to be re-assigned. I try to do it about 2 weeks before, get a price reduction and it usually sells. Good luck.