BPO/REO blog

BPOs as a Main Source of Income

In today’s market, dominated by short sales and REO properties, a new breed of real estate agent has emerged: The BPO Guy.

You many know The BPO Guy – he (or she) does hundreds, if not thousands, of BPOs each and every year as their primary source of income. You might even BE The BPO Guy.

There are many reasons why an agent would choose to be The BPO Guy:

• Faster, more consistent income stream than waiting on commissions
• Helps newer agents become familiar with the market
• Opens the door to possible REO listings down the road
• Some agents may find BPOs more enjoyable than selling houses (personal preference)

These are all good reasons and the current marketplace is very conducive to this method of earning a living. Let’s talk about the 4 reasons listed above.

Faster, more consistent income stream than waiting on commissions

The traditional way of getting paid is still the most lucrative. There are some agents who have the right combination of factors to sell houses – they have the proper connections, they work extremely hard, and/or they just plain have “luck” on their side. In these cases, selling houses represents the best way to make money. And usually, these agents make A LOT of money!

For other agents though, BPOs represent a steady stream of income. Sure, they still sell houses every now & then but it’s the BPO business that puts food on their table. When a house is sold, it’s more of a “bonus” income rather than their primary income. More & more agents are “morphing” into The BPO Guy. How much can you make? See this post for some ideas.

Helps newer agents become familiar with the market

For a new agent, real estate can be intimidating. They have just completed countless hours of education to receive their state license, and now their head is spinning with ideas. They are raring to go, ready to tackle the world. They receive their first listing through some combination of luck and/or connections, and start counting their commission already. Then the real world hits and they are stuck with an overpriced property with no buyer interest and little to no offers.

If the agent had more experience with the market, they would have had a better idea where to price that property. Performing BPOs will force an agent to become familiar with property values. Just filling out the actual BPO form is like taking a mini course on property valuation every time. Once an agent is intimately familiar with the property values in their area, they will invariably become a better agent.

Opens the door to possible REO listings down the road

One of the main reasons agents perform BPOs is for the potential REO listings on the back end. Getting REO listings means commissions, which means larger paychecks.

Some BPO Companies require agents to complete BPOs in order to receive REO listings so they have no choice in the matter. Some BPO Companies pay, some do not – the expectation of REO listings is the proverbial “carrot” dangling in front of the agent.

Earlier I wrote a blog post about this subject so check it out here:
REO Listings

Some agents may find BPOs more enjoyable than selling houses (personal preference)

There’s a whole other category of real estate agents who just feel more in a comfort zone performing BPOs rather than selling houses. It’s more a matter of personal preference but generally these are the “busy-body” people who want to stay constantly busy. Or they could be a current or former appraiser, and property valuation comes easy to them. Or they could be a computer/tech type person, and they find that filling out BPO forms is more enjoyable than writing up contracts. It all depends on the person.