Masters in Real Estate Certified Commercial Education BrokerOwner

Masters in Real Estate Certified Commercial Education Broker/Owner Browning Group LLC Liquidated 130+M REO Properties/last 3 years 25 years of Commercial Real Estate Experience Commercial Director for CB NRT-17 yrs National Trainer/CREOBA CEO/The REO Institute of Colorado Presented by James A. Browning MRE, CEC, FSP, CREO

Market Trends 2009 -2010 over 6 million homes were foreclosed Delinquent loans are at 10% 2009 -2010 there were 175 bank closures Over 800 banks are listed as “in trouble” Unemployment – National and State

REO This number will increase- Shadow Market Over 5 million properties on the market 75% of the sales are Short Sales or REOs 4 th Qtr 2010 = 1 in every 397 homes in some stage of foreclosure

Reality Bytes Every 13 seconds, a new foreclosure starts Estimated- 9 million new foreclosures by the end of 2012 Over 60% of modified loans are in default

• The foundation of REO (Real Estate Owned) is the BPO Process (Broker Price Opinion). • The first step is understanding what the purpose of a BPO is, who uses it, why and when. • The next step is the perfecting of the BPO process; without this process there will not be repeat business. • To be a qualified BPO professional, one must always be concise, accurate, and complete the BPO in its entirety. Class Overview

Why do BPOs? Receive more income Increase your skills Become more proficient Daily business marketing Listing opportunities Performing BPOs makes you a superior Real Estate Professional

BPO=Broker Price Opinion This is a method used to estimate the probable selling price of a real estate asset.

This method of estimating a price for the asset has similarities to a Comparable Market Analysis – CMA. These BPOs are specifically assigned to a broker from an outsourcer, lender, or BPO company.

Outsourcer or BPO Company Either a division of a financial institution or a stand alone company Middle man between the broker and the banks/lenders The outsourcer assigns the BPO to the broker Quality control, and submitting to the bank

Who can perform a BPO? Realtors, brokers, sales agents, appraisers (acting in an agent capacity), and active licensee's Approved by employing/designated broker

What purpose does a BPO serve, and when is it requested? Request is made for the broker to complete a BPO for a fee, or for the listing Could be made at the 1 st delinquency Could be made for the bank to make a financial decision on an asset

BPOs are requested for Foreclosures Short Sales REOs HELOC's And due diligence for investors or banks

What is the difference between an interior and exterior BPO? Exterior BPO: 1 st request Exterior inspection and photos Interior BPO: Requested when property is accessible Schedule a showing, or once REO Photos and Fees vary, this will be discussed later.

Real Estate Owned

What is a REO Property? Properties that have gone through foreclosure Properties revert back to the lender, mortgage company, or bank

Banks do not want to own these properties. Lose more money on property ownership than on lending money.

Who can perform REOs? Active License E&O Insurance- amount required by clients 3 -5 years REO experience REO Education, Designations Service Area- zip code 3 -5 References

What is an Outsourcer? Consider this the client Division of financial institution Stand alone company Asset Management Co. Assignment through sale “Mark to Market, Cradle to Grave”

Expectations: Responsibilities and accountability Complete tasks on time Follow directions- they will not hold your hand Accuracy in pricing Monthly Marketing Reports, updated BPOs Property preservation knowledge and vendors

Challenges of becoming a REO broker. Negatives- only you can decide! More work More responsibility More paperwork Lower commission

Good= steady stream of listings Non-emotional sale Knowledge = Routine Lower commissions- more closings! Positives!

How to work with Asset Managers? 1)Be an expert in your service area. 1)Understand their work load! Average AM portfolio = 200 -400 properties 3)Communicate via email 4)Take initiative!

Haunted REO Property with 5 Major Issues