I've done alot of BPO's lately. It is tough and not real accurate IMHO. You can't really judge a book by it's cover, especially if you have been in this business any length of time. I have been shocked.

I basically go by square feet, number of rooms, properties that have sold in the neighborhood recently and make sure they know that a drive by BPO is not going to be 100% accurate in my books but I considered the location, outside condition and recent sales. I think they typically average all their BPO's on subject property to come up with the figure.

I probably didn't help you much Gary but drive by bpo's are certainly miles from an actual appraisal when you can't get in subject property.

The banks know that they are not going to be that accurate. That's why they are only exterior BPO's.

All you can do is go by the best comps in the area and submit it.

I think mainly interior BPO's end up being REO's...though I may be wrong?

Gary, we are not judging books. We can tell a lot by the cover. The broken window, the garage door, the lawn, the fence and shed, toys laying around, a broken car in the drive way. The picture gets painted very well on what the inside looks like. I don't need to go in, thanks.

I sound like a broken record but when the picture you take from the road shows only the top half of the house because of snow banks it's all guesswork.  And the one where they want a picture that verifys the address  .  .  . what a joke.  Even the mailboxes are gone, often courtesy of the snow plow.

Use the SWAG method. You just need to do the nest you can, maybe ask the neighbors if they're around but consider that the property will need substanial work to get it into shape and if it doesn't then the client will be pleasantly surprised. The clients know it probably needs work so you have to consider that.

Plus if the client is selling the mortgage you don't want to be part of a overprcied misleading opinion do you?

Not all BPOs are potential foreclosures although many are.  Most of the ones that I have done recommend that you base the interior condition on the exterior.  When they don't, I make that assumption anyway.  I've done enough INTERIOR BPOs (my HUD listings are a good example) to know that in many instances the interior is way, way worse than the exterior because they keep up the "appearance" consistent with the neighborhood.  Guess their neighbors never come in to visit  :)

Do your tax records show the room compositions like # of living areas, bedrooms, baths, etc or do you estimate that?  That is the other difficulty I have.  I usually ask them if they want me to estimate number of rooms or ask if they can they provide details.  Most of the time they delay the due date and provide the information for me.  Really helps to do that when I'm already backlogged just to delay the due date if nothing else!

Taking the pictures can be challenging.  I have an assistant take the pics now for me but it is worrisome.  People in TX have guns and don't take kindly if they catch you taking a pic of their home.  Once I had a guy follow me all over town.  He came out just as I snapped the picture.  I drove off but he got in his van and followed me.  I pretended like I didn't see him and went to the other properties that I had to get pics for.  He didn't give up and eventually I just drove to the police station. I had called them to tell them I was on the way there and that someone was following me.

Gary, when you do exterior BPO's consider the interior fair and when valuing be extremely conservative and make notations and photos of any boardups in the neighborhood within one block, if there any.  Take street view photos as well.  Always make a notation on the report that "no interior inspection of the property was performed" on all valuations and do check with the City or Village if the home has any code violations posted against the home.  Also, if the home or building shows signs of possible vacating - notify the bank of that possibility as well.  

The bank could be reviewing files and checking on the status of the median pricing for the area, borderline loan files that are questionable late payments, potential short sales and yes, foreclosures.  

Five BPO's is a lot to do or be order for one day but this is the tip of the iceberg.  

Gary,

When I do an exterior BPO, I always assume the interior is in comperable condition to the exterior.  BUT I never give a REO value the same as I would give a owner occupied home.  A distressed sale, if it is in great condition or not, will not sell for as much as a lived in home.  So I try to find other REO comperables to use as my comps so that I use a distressed value.

Gary:

Some of the companies won't allow you to utilize REO's in the BPO so be careful with using them. I just completed 3 and the loan servicing company said I didn't give them any that had the same exterior as the subject property. I looked all through MLS for comps and couldn't find anything that looked like the subject. I also documented this information in the BPO. They came back and said there were homes on realtor.com. They also wanted homes less than 1 mile from the subject. After redocumenting exactly what I had done they approved the BPO's.

I made the assumption that the company called me with 3 rush jobs because they liked the work I had done in the past. However, this really tried my patience when they called me back with their comments. I finally said if they could find a home that I could use I would redo the BPO. Again they approved it. It just depends on the company and your relationship with them.