If you're not a big bank direct broker then it is good practice to start doing BPOs as if you were doing them for a big bank AM. Here's what I mean.....All too often REO brokers (especially inexperienced ones) are too quick to simply "list" a few repair items and then guesstimate their costs on their BPOs. Since with many (obviously not ALL) companies this is acceptable, it becomes a common practice. The reality today is that most big banks are outsourcing their REOs and BPOS so you might already be working for them and not know it! I am one who believes strongly in the mission of "making housing affordable" for homeowners and potential homeowners, by giving them good solid properties to purchase, without having to invest a life savings to get them habitable. If you are NOT of this mindset then you NEED to shift your thinking right away if you're going to work for big banks. Without laboring too much on this, let me just say that you'll need to really sharpen your eye when you are inspecting one of their properties. You should walk through the home and look for even the most minor repairs/fix-ups just like you would if you were telling Joe Average home seller how to get his home ready to compete on the retail market. If a room needs paint touch ups then indicate it. If a bathroom faucet is loose-list it. If a door doesn't close properly-note it. If you see that the exterior paint is slightly faded and a few months away from needing a new coat then tell your AM. The point is (and this is almost word for word what a big bank rep once told me) that you "should be prepared to get these homes ready to outshine EVERY home on the market in the area. These should be the very BEST LOOKING move-in ready homes available to any buyer (retail or REO). We should be priced the best, look the best, sell the fastest and be the home that costs the buyer the least amount of initial investment to own." While most outsource firms won't "rehab" a significant number of their properties, one of my big bank reps refurbishes around 80% of his. And guess what....we LOVE this guy because ALL of his properties sell and they sell FAST! When I get an assignment from him I know it's money in the bank!
On a side note: A perfect example of this lazy oversight that's all too common in REOs reared it's ugly head recently (and to my benefit). I was asked by an AM to take over a listing after another agent had it for 8 months. She stated that the BPO appeared to be incorrect. The home had a blue tarp on the roof so she knew it had roof damage, yet this guy's BPO indicated only "clean carpet-$500"." I went over to the house and found more than $15K in repairs!...a WHOPPING difference. Consequently, we got a big reduction, placed the home on the market "as-is" and sold it at the new price in about 7 days! Bottom line: be diligent, respect your duties to your client and you will ALWAYS win!