Reasons For When BPO Volume is Down
Time of Year:
The BPO industry like any market has cycles or times of year when things are busy or slow. The longer you are in the business, the easier it is to spot the patterns.
For me business got pretty predictable when I was doing BPO work from 2006-2011 and when things would get quiet I would initially get worried but then would quickly snap out of it and remember the cycle.
Low Vendor Score:
It may be that volume is down for an individual because their quality of work is suffering which would affect their vendor score with a BPO mill. Being late, getting too many QC kickbacks, giving bad opinions of value on a property and other reasons can all affect someone’s score or rating with a company.
The key is to avoid issues that will cause your score to go down. A way to fix this is to get educated. One way is to become an expert at BPO’s (put link to BPO Basics 101 course here). Another is to integrate NABPOP’s BPOSG into every BPO you do because many of the top BPO companies use it and judge by it. Smart real estate pros realize that they need a system and can apply the concepts of the BPOSG (like the bracketing ratios) into everything from pulling comps that are have the proper variance on the range that you want to use for location, square footage, year built and age to name a few specs, to providing extra commentary, so that you are less likely to get an order kicked back.
Be on top of your game or get and stay educated so that you are more likely to kill it in this business.
BPO Mill Lost a Client:
Banks, lenders and asset management companies don’t put all their orders with just one company, they spread it out and sometimes overlap with a few different BPO mills. Real estate pros doing BPO work will sometimes see a BPO request on the same subject property but with multiple companies.
Banks (like: Wells Fargo, Bank of America or Chase) outsource BPO’s to BPO companies like: Clear Capital, ServiceLink, Pro Teck, Assurant, Residential Real Estate Review or other BPO mills. They will oftentimes have 1 property that they send out to multiple BPO mills. They do this for various reasons, like: getting multiple opinions on a single property, so that they are informed as best as possible and have a few reports (done by different real estate agents and brokers) to use to see if the final opinion of value is accurate and the other pertinent information matches up.
You can’t control if a BPO company messes up (except by doing your part) but understanding why it happens and having a plan in place when you see a change, will help you ‘weather out the storm.’
Companies Have to Make a Profit:
They also choose to do a BPO (when allowable by law) instead of an appraisal to save money. A bank will oftentimes pay between $125-$175 on average per BPO to a BPO mill where in turn the real estate pros doing the BPO order will earn $35-$75 to complete the work and submit it back to the middle man/BPO company that assigned them the order.
Each BPO mill has to compete with the other BPO companies out there, some do a fantastic job and keep most of their clients happy over the years. These companies have to be accountable, aggressive, consistent and more to keep accounts. Sometimes the one who suffers at the end of the day is the person doing the actual BPO order because they aren’t in full control over their business.
By ordering a BPO order instead of an appraisal, the lender or bank not only saves money but can get multiple opinions on a single property for the same price (and oftentimes less money) than the cost of one appraisal report. Do the math, it adds up and I think it’s a smart option.
Even though his fact is hard to accept, everything trickles downhill, so it’s best when you can insulate yourself, plan for your future and your success and do the best you can everyday.
Competition is Fierce in the BPO Industry:
Lenders and banks have a handful of Top BPO mills to choose to do business with, so if one company messes up too much, charges too much, has bad performance too often or they consistently provide low quality work, then the bank will pull their primary account and business from one BPO mill and move it over to another. I’ve seen this happen time and time again and have heard first-hand stories of why a BPO company messed up and lost a client.
For the ones doing the work this can happen silently but the effect is almost immediately noticed by seeing volume drop. For real estate pros doing BPO’s (or being used to getting their main volume from and) for 1-2 companies, this can mean panic, devastation and sometimes an end to this side of their real estate business. Unfortunately, I’ve personally seen and heard about this happening a few dozen times with people that I’ve helped over the years with automating their BPO and REO orders with our BPO AutoFill software. (Put in a link here to BPO-Automation.com)
Oftentimes, smart agents and brokers will be signed up with lots of BPO, REO and Asset Management companies so that if/when this happens (and it will and keeps happening, even today) they see a spike of volume with one of the other companies then they were used to seeing. This is a ‘Win/Win.’
Not only is competition fierce for real estate pros doing the work, I’ve seen and experienced how the companies doing real estate valuations have had to evolve over the years or they had to sell out to a competitor, been bought out, merged, closed up shop or gone bankrupt. Only the tough survive, just like in the real estate business, right?!
Take Back Control and Get Informed:
It truly never hurts to pick up the phone and call a BPO mill when you see that your volume has changed to check in and see what’s going on. When calling and talking with someone from customer service or your rep at the company that you do BPO work for, they should be able to offer some helpful advice, you should ask for them to check your vendor score and to see if you are missing (or have expired) paperwork that may be preventing you from getting orders like you used to as well as may be able to let you know that volume is just down in your area right now.
As a past BPO agent myself, I have seen this happen and been affected by this situation too. I knew how to protect myself and wasn’t shy to reach out to the BPO mill to see what was going on. And I know that what you are told isn’t always the truth because the reps have to protect the best interest of the company they work for and that internal information is proprietary. Sometimes, the company reps will be honest with you and share what is really going on, especially, if you are a long-time, highly-rated, preferred agent with them.
So when in doubt, reach out!
I hope this blog has helped you understand more about what it really means when BPO volume is down.
Question: Have you been affected by this situation? How did you handle it?