BPO/REO blog

Completing Your BPO – How to Find Comps when There Are No Comps!

One of the questions that frequently comes up is, “This property is unique/rural/hard to comp, what comps should I use?”

Normally in a situation like this, there are comps available – you just have to dig deeper to find them. Here’s some tips that can help get you through a tough BPO.

• Can you go farther back in time? Most lenders want sales within 6 months but if you need to go back 12 months to find the best comps, that’s ok as long as you explain yourself in the comments.

• Can you expand your square footage search? Many lenders want you to stay within 20% of the gross living area (GLA) but if you go to, say 25% or 30%, do you find more comps? Try staying within the same room count if possible, for instance if your subject property is a 3 BR/2 Bath, look for other 3/2’s.

• Can you go farther out for comps? Generally, if you expand your search to encompass a wider radius, you’ll find more comps available. Again, the key here is to explain yourself somewhere in the notes, so the lender knows WHY you had to expand your search radius.

• Any combination of the above could yield even more results.

Many forms will allow you to make dollar adjustments for any differences. We’ll get into that topic in a later post.

Still Stumped?

If all else fails, you can always call your Asset Management Company (AMC) and see what they recommend. Ideally, speak to an auditor/reviewer and get their input, as they will be the ones reviewing the order.

Try to get the name and email address of the auditor/reviewer you spoke with. Once you submit the bpo for review, follow up with an email letting that auditor/reviewer know that you submitted the order. That way they are already somewhat familiar with the order, and it’ll be more likely to pass the review process.

As always, if you have any questions, comments, or suggestions, please leave them below.