KW Default Solutions
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If you do BPOs, you'll probably get a report sent back at some point. This lesson covers the usual reasons and how to fix a returned report the right way. A returned BPO usually means the reviewer couldn't follow something in your report. Your job is to answer that question in the report itself.
A broker price opinion (BPO) is an agent's estimate of what a property would likely sell for. It's usually ordered by a lender, asset manager or BPO company. Before it goes to their client, a quality control (QC) reviewer at the ordering company checks it. If something doesn't add up, they send it back with a revision request: a note that says what they need fixed or explained.
Revisions take time you didn't plan for. Many BPO companies also keep a scorecard on the agents they use, so it helps to get it right the first time. How a revision affects your pay or future orders depends on the company, so check their terms.
At KW Default Solutions (KWDS), we train Keller Williams agents on default work, including BPOs. The tips below come from that training.
Why BPOs come back
Here are the mistakes our training sees most often behind a returned report:
- Property facts that don't match. The bed and bath count is different in two sections, the square footage or lot size conflicts with public records or the MLS without an explanation of the source and how the conflict was handled, or the property type is wrong (a condo entered as a single-family home). The subject, the property you're valuing, has to be the same property in every field.
- Comps that don't fit. Comps are the recent sales and listings you compare the subject to. Reports come back when comps are far away and closer ones exist, when they're a different property type or price range, or when an obviously better comp was skipped. The reviewer wants to see that you searched close by first and widened only when you had to.
- Vague comments. "Average condition, typical for area" tells the reviewer almost nothing, so they ask you to elaborate.
- Missing or poor photos. A required angle is missing, damage that obviously exists isn't shown, or photos are dark, blurry or sideways.
- Client instructions ignored. Each company has its own rules, like allowed adjustment ranges, which comps to use first or "no REO comps unless necessary." (An REO is a home the lender now owns.) Miss one and the report can come back even if your value is right.
- Something unusual left unexplained. An odd sale, a unique feature or records that disagree. If it would make you ask a question, assume the reviewer will too.
Answer the question the reviewer actually asked
Read the revision request and break it into three parts: the item, the concern and what would resolve it. For example, "Comp 3 is outside the typical radius, please explain" is a question about your search. It doesn't automatically mean you need a different comp.
If the request is unclear, ask through the company's normal process before you change anything. Save the request and your original report so you can show what changed later.
Then fix the cause and check what else it touches. A corrected fact often changes other parts of the report. If the square footage changes, recheck the comps and adjustments that relied on it, and the value that came out of them. (Adjustments are the price changes you make for differences between the subject and a comp.)
Make your comments do the work
Specific comments are one of the easiest ways to prevent the next return. Use details like the ones below only when your evidence supports them, and name the source or visit date. Compare these:
- Vague: "Average condition, typical for area."
- Specific: "Kitchen updated circa 2015; baths appear original but in clean condition."
- Specific: "Backs a collector road; traffic noise noticeable in yard but less so inside with windows closed."
When records disagree, say so instead of quietly picking one. Our training flags a square footage difference of more than 10% from tax records as something to explain. Say where your measurement came from. A comment like this answers the question before anyone asks it:
The same goes for a comp that doesn't fit the pattern:
A fictional return, worked through
This example is made up for practice. An exterior-only BPO (you only see the outside) comes back with two notes: "Subject GLA does not match tax record" and "Comp 3 outside typical radius, explain." GLA is gross living area, the finished, above-ground living space.
Your report says 1,650 square feet. The tax record says 1,420.
- Check your source. Your number came from an old MLS listing that counted a finished basement. Above-ground area matches the tax record, so you correct the GLA to 1,420 and note that the old listing included basement space.
- Recheck what depended on it. Two comps were chosen because they were close to 1,650 square feet. At the corrected size, one still fits and one is now much larger, so you replace it with a closer match and update the adjustments.
- Explain Comp 3. Only two similar sales closed nearby in the time frame. You widened the date range first, then the distance, which is the order our training starts with. The comment says which nearby subdivisions you searched, why you went further and that Comp 3 matches the subject's type and age.
- Read the whole report again. Make sure the corrected size shows up everywhere and no comment still describes the comp you replaced.
Your value may change here because a fact changed. That's fine, and your notes show exactly why.
When the request is for a different number
A reviewer can point out a real error or send you evidence you missed. Look at it, fix what's wrong and explain any change.
A request to hit a target price is different. Don't change your value just to make the request go away. Your value should come from the evidence. Keep your reasoning, and if you feel pushed, bring in your broker or the right contact at the company.
Before you submit next time
Before you hit submit, take two or three minutes for one last pass:
- Subject: address, bed and bath count, square footage and lot size match in every section.
- Comps: they make sense together, and you can defend any outlier.
- Comments: specific, and they match the numbers and the photos.
- Photos: every required shot is there, clear and labeled.
- Client rules: you followed this company's instructions.
Try this
Next time a BPO comes back, or with a fictional one for practice, write a four-line revision note: the concern, the source you checked, the change you made and what else you rechecked. If someone else can read those four lines and follow what happened, your fix is clear.
If you're working on a BPO that came back and want a second set of eyes, reach out. We're happy to help. Contact KW Default Solutions