Realtor BPO Value or hindrance?

[Michelle Winberry]

Hi Everyone. 

My profile is new to Bigger Pockets, I have been lurking here off and on with my husbands profile for several years and I decided to get my own. So, today I wanted to have a conversation about something that has become a real frustration point for me in my personal business.

I am a licensed Realtor with designations SFR (short sales and foreclosures) and BPOR (BPO's). I don't use these skills usually because I prefer to be on the Investor side of the equations.

I use Automated Valuation Models, and BPOs rather heavily as tools in the investments we do but the situation has really gotten out of hand IMO because the values are so unreliable.

I know BPOs are a pain, a lot of work, and little pay, but how can we get better reviewing before signing off on these valuations that are being ordered?  

I believe that the valuations are really creating havoc in the background of the housing industry turnaround of especially the low price band homes. The buyers of the REO's or Non Performing Notes that have these reports attached to them can be hurt, or the properties are sitting and languishing longer because pricing models built off of these bad valuations are keeping the inventory stagnant....

Here is an example of one I had today:

SFR 3/1 in an Urban area in Kansas City....BPO says valuation signed off on is $70,000.00. Comps are pulled from very very different demographic neighborhoods up to 2 miles away when comps were available in same subdivision. Same subdivision comps reveal comparable values to be between $7,500.00 and $25,000.00. The pricing model for this as a non performing note is in the $40K Range AS A NOTE....so naturally this asset continues to languish in the vacant abandoned 'shadow inventory' because the values are so ridiculously off....

Is anyone else experiencing this? Or have a suggestion or solution to the problem? Without reality built in at the BPO level, the recovery continues to lag on and on and on and on because we cannot get these assets cleaned up.

Thanks for any conversation and input.....

Michelle