With brokers miscalculating repair costs on bank-owned REO properties by hundreds of thousands of dollars, BrokerPriceOpinion.com has developed a new online tool to fix this problem.
BrokerPriceOpinion.com, a provider of customized nationwide valuation solutions through a network of more than 65,000 real estate professionals and appraisers, is now offering its BPO repair cost estimator which can be used as an add-on to the BPO. The new tool generates accurate repair estimates in minutes for REO properties, short sales and other properties.
“With the repair cost estimate add-on, we can provide our clients with a more comprehensive inventory of repairs that will help them determine accurate short sale and REO pricing,” said Walt Coats, CEO of BrokerPriceOpinion.com.
During a BPO, there is a section where a broker has to list repair costs on an REO property. The expectation is that the real estate broker has knowledge on how much a certain repair should cost. However, brokers are not familiar with this and their misjudgments for repair estimates results in severe dollars being lost.
According to RealtyTrac, there was an all-time record of more than one million REO properties on the market at the end of 2010. Most of these homes are usually in disrepair as they go to foreclosure, so it is critical that institutional investors, lenders, servicers, appraisers, real estate agents and brokers have access to an accurate and standardized system to estimate the cost of necessary repairs for homes, taking into account varying costs by region.
The Westminster, Colo.-based company’s BPO repair cost estimator enables real estate professionals and investors to determine REO marketing opportunities and whether homes should be sold “as-is,” “as repaired” or as a rental based on local cost estimates for repair.
The new Web-based BPO tool covers repair cost for the interior and exterior of an REO property. Another feature is that it covers maintenance estimates for the property including lawn mowing, winterization, board-ups, replacement of appliances, debris removal, and patio and driveway repairs. The tool also creates consistent repair and maintenance reports with prices for labor and materials localized to specific regional ZIP codes.
“REO inventories will continue to swell for many months ahead as more foreclosures emerge from the shadow inventory,” Coats said. “Banks, investors and other institutions quickly need to get a handle of their REO repair and maintenance costs that apply to the diverse properties, neighborhoods and markets represented in their portfolios.”
Because the tool eliminates guesswork in producing cost estimates, there is a decreased risk for fraud to occur in REO property work. The BPO repair cost estimator provides local quality control checkpoints to compare estimates in a real estate listing to the actual local repair cost figures.
To develop the new tool, BPO teamed up with The Bluebook International Inc. This company is based in Lake Forest, Calif., and has been providing national repair cost data standards for 46 years.
The BPO repair cost estimator meets or exceeds FHA and HUD compliance guidelines for local repair cost estimates. The tool is also compliant with new GSE and interagency valuation requirements.