Who is a BPO customer?
Anyone who would like an accurate house or real estate price estimate. Anyone can order a BPO. Homeowners can request a free BPO from a C-REPS for any reason when making financial decisions. The most common reason is determining a selling price when listing their house for sale. C-REPS are willing to do a free BPO in order to gain clients and obtain listings.
BPOs are just as accurate as appraisals and, in certain cases, even more accurate. How could a BPO possibly be more accurate than an appraisal? Agents and brokers interact with home buyers as a significant part of their daily work routine. Agents and brokers know the mindset of home buyers. Knowing what a buyer is willing to pay for anything is the most critical component of any appraisal. C-REPS are BPO certified agents and brokers trained in the proper procedures to perform accurate valuations. The combination of proper valuation training and knowing the mindset of real estate buyers will produce the most accurate valuation possible.
The overwhelming majority of BPO customers are in the mortgage and lending industry: Banks, Lenders, Mortgage Servicers, Asset managers, Appraisal Management Companies, AMCs, and BPO Companies, to name a few. Government entities such as Freddie Mac, Fannie Mae, FDIC, GSA, etc. also utilize BPOs. These organizations order thousands of BPOs every day across the country. These organizations need the vital information in a BPO to make financial decisions.
- The mortgage industry can be broken into three main categories:
- Default (REO, Foreclosures, Short Sales)
- Servicing (re-finance, PMI, HELOC)
- Originations (home purchases)
The default mortgage industry essentially invented the BPO to make financial decisions and the mortgage service industry followed. The mortgage origination industry has limited use of BPOs due to rules and regulations imposed on the lending industry.
BPOs are also finding their way into legal proceedings. Progressive judges and attorneys are starting to utilize BPOs (vs appraisals) to build cases and as evidence in court cases. C-REPS can be hired as expert witnesses as well.
What is a BPO Company?
BPO Companies can be both a BPO customer and a BPO provider. To a C-REPS, the BPO company is the customer. A C-REPS is an individual BPO vendor to a BPO company. A BPO company has tens of thousands of agents and brokers as BPO vendors. A BPO company, in turn, is a BPO vendor to the mortgage industry (dealing in the thousands).