I can't count the number of times I've seen burn-out tear-downs with the following comments:

"Great investor opportunity. Rented for $xxx per month and tenants would love to stay!"

The comments might be humorous, but they have no basis in reality. It's no wonder real estate agents are rated just above personal injury lawyers in scum-bagginess.

Thank goodness the mills aren't healthcare providers.

Say your mom needs an exam to see if anything's wrong with her, or if she's just fine. Because you just don't know--she doesn't say much. It'll cost upwards of $400. But there's this company who says they can do that for say 1/10 the cost. All they'll need is a recent picture of mom with her address, date of birth, height and weight. They call it a "drive-by" exam.

Once they have that, they'll compare mom's picture and her very brief info to six pictures of other women whose brief info is more or less is similar to mom's (within, however, they tell you, very strict tolerances). But, here's where real VALUE comes in.

The six pictures in addition to having addresses, dates of birth, height & weight also have "comments" written on them such as, "feels pretty good most of the time"; "non-smoker"; "has allergies"; "recent double-hip replacement"; "takes vitamins & supplements daily"; "has nausea & vomiting"; "recent facelift and lipo".

This company also takes into consideration what each of the six women are wearing--shoes or sneakers, sweaters or blouses, etc., whether neatly dressed or disheveled, and also whether they are smiling, not smiling, or just looking blank. More added valuation metrics for you, the client.

And from this data, and with rigorous QC and application of other arcane calculations, they are able to tell you what's wrong, or what's right with your mom. And you'll get a 9-page report. In 48 hours.

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Disclaimer: The foregoing is not meant in any way to disparage or mock the honest, hard-working BPO agents who give their best to try to do this work under a great deal of pressure, impossible expectations, with very little respect and even less compensation.

I can see what you are getting at and I like your post. I found it really amusing and well-written.

I think in a way this is comparing apples to oranges though. When you are dealing with people's health, there are certain factors like genetic tendency in one's family toward certain diseases that just don't apply when comparing something like houses. Health care is a matter with many more complex variables than is house valuation.

You haven't come right out and said it but I think what you are getting at is that it would be preferable for banks to order appraisals. I am not going to disagree with that. But I do think BPOs are also needed. I think there is a place in this process for both.

Here is the reason why I say this. I keep seeing properties in my local MLS that say things like "priced $25,000 less than February 2011 appraisal". I get property fliers in my email that say similar things all the time.

Now I work in a market that has not been hit as badly as some areas as the rest of the country. Our values in most areas of town are not dropping like they are in other places in our nation. So sharply declining local values can't account for why these agents are having to consistently list these properties at an asking price less than a very recent appraisal. Because we don't have sharply declining values in my market area.

I do not think this is because our local appraisers are incompetent or are deliberately inflating the numbers. Not at all. I think they are very well-trained and are doing a thorough report based on what they find to be fact.

But unless they are regularly out working with buyers it may be difficult for them to get a reading on what a ready, willing and able buyer might say in the current market climate about a particular house in comparison to other house choices that are available in that same immediate neighborhood.

The price the house will ultimately sell for is the point of intersection of the highest amount the buyer would be willing to pay for it and the lowest amount the seller would be willing to accept for it. This is something that is hard to quantify ahead of time in a scientific way. Buyers are all very different and have different wants and needs and feelings and financial abilities with regard to what they can afford. Buyer behavior does change over time as well.

Obviously what the bank wants is a crystal ball that will tell them exactly what a particular house will sell for and in what time frame. I don't think that either an appraisal or a BPO can ever tell them that with 100% accuracy. All we can do is provide them with the data and our professional opinion based on our background, appraiser or agent. I think the bank can find helpful information in both types of reports.

Appraisers are faced with some of the same issues we are when it comes to placing a value on a home. Although they take exterior photos of the comps, they haven't seen the inside of the comps any more than we usually have. So...like it or not...they may be basing their opinion of condition of the comps on the same things that we are, including, likely, the comments that are made by the listing brokers/agents of the comps.

My stupid QC requirement of the day...one of my companies, (Powerlink) wants street signs for address verification if there is no number on the house. If you don't have a photo of the street sign, they want tax records uploaded.

Problem is, they want the tax records sent to them as jpegs...when they are originally saved to my computer as pdfs. A PDF file is a small file...converting them to jpegs makes them monstrous. And of course, their website won't take a large jpeg. So if you reduce to a size you can upload, it would be unreadable in any case.

I have a two-page tax document to upload. It would upload as one document as a PDF, but it takes two jpegs to get the same thing accomplished. PDF file: 73K. JPEG file 1: 775K. JPEG file 2: 489K.

I was pretty steamed about the situation, and I'm sure it was conveyed. Takes more time and effort.

Thanks, glad you liked it.

No, I'm not advocating appraisals over BPOs. As you point out, neither can be completely accurate.

My problem is with "added value" items the mills sell to their clients that have no value whatsoever, but increase the amount of time and work BPO agents have to put in on the reports.

Many reports have become mini-appraisals, but with a lot of other data required that doesn't actually help determine pricing. To the mill client, it probably looks good because the report is so large and at such a tiny cost to them. But I question the real value to the client other than a huge report that leads them to believe that it may be more accurate than a smaller report from another mill just by sheer size and detail.

And I certainly disagree with providing MLS printouts to anyone other than a buyer or a direct seller. Especially when the agent can have no expectation of receiving a listing or a sale.

I agree. It seems like the mills expect a lot from us for what we are paid, and it's all to try to make them look better than the other mills to the client.

They could make themselves look better by having us do a more simplified, organized, straightforward report because we can get those turned in more quickly and thus turn time would improve.

Here's a little visual to help support this "Missing Deck" discussion:



I took this photo from the rear of a Cape, with a walk-out basement, that looks quite complete out in front on the Road. I don't rightly know if it's just one big deck that's missing, or two (2) smaller decks; but to be safe, the REO people have the 2"X4"s nailed on the inside of the French Doors to keep any unsuspecting Buyers from taking a tumble. I guess the New Buyers can decide for themselves whether they want two decks or just one . . . . or they may just want to leave it as it is, with this handy way to dispose of guests who over-stay their welcome.

This Cape, by the way, is a "Manufactured Unit" . . . . NOT a Mobile. It arrived on this site in four (4) pieces aboard a flatbed. Never got completed before the bottom fell out of the market. Some Mills still refuse to allow us to use regular Stick-Built units to comp against these Modular houses . . . . even though the quality of the Modular often surpasses the Stick-Builts (built indoors, with no lost days due to weather conditions) and with Continuous Quality Control.

That house isn't missing a deck! It's missing a lot of dirt around the foundation.

How can you tell, Ryan? To me, it looks like the deck would have been at the level of the top of the stone.

Beautiful house, tho. Would look great with a veranda.

Linda

Great thread. My biggest problem when completing BPO is condition or adjustments for condition. Even on an interior we do not know if comps condition comments are correct or just a lazy agent. Not wanting to guess if comps has granite counter top and SS appliances, it makes it challenging.

Here's that same house from the front:



Left un-occupied and without enough heat to melt the snow off the roof is sign it's well insulated. Gutters are worthless in Vermont, because as the bottom of the downspout freezes, and then the gutter just becomes a glacier which ultimately gets so heavy it breaks right off, and hangs there looking like somebody's spent noodle.

The "stone" you spoke of in the rear is actually "Tyvek" or some kind of house wrap covering a stud wall at ground level. I truly don't know how this property got fully mortgaged in the beginning without being completed as a condition of the Original Mortgage which was in 2006 or 2007. I'd imagine Funds were advanced for this completion work which was never completed . . . . but it was lived in for at least 2 years.

Sorry we still have 3 or 4 feet of snow on the ground here.

^^ is that a hanging gutter by the front steps?

Sorry, I thought it was obvious I was joking.

Like getting your ears lowered instead of getting your hair cut.

Why yes . . . . yes it is; just like a "Hanging Chad" only bigger !

See, after depositing melting snow/water into the snowbank where it freezes, the downspout itself will freeze into a column of solid ice, and then drainage ceases altogether until the whole gutter/downspout becomes weighty and detaches itself. Sometimes it swings around on the way down and punches out your windows too. Some people will run a heat tape through the inside of the downspouts; but that occasionally causes people's houses to start on fire and burn down . . . . which isn't a good thing either.

Many people take the gutters off and store them in the garage for years until it's time to sell, and then they'll put them back up for the next Owners to worry about. Silly.