BPO's, CMA's, and appraisals are all used to help different parties figure out some form of "fair market value".  I think their definitions are adequately covered elsewhere -- what I am most interested in exploring in this post is their use, particularly by banks / lenders.

Before any money exchanges hands in a loan, lenders require a satisfactory appraisal on file, showing that the home's theoretical "value" is equal to or greater than the amount of the loan.

Then, before a home is placed on the market for sale, the listing agent (if they're doing their job) prepares a CMA with a list of comps to help the seller in determining a suitable list price.  This is often a very different number from the appraisal.

But, before a short sale is accepted by a lender, or a foreclosed home is returned to market as an REO sale, the lender orders a BPO (and sometimes an appraisal as well). This BPO, whether in line with the earlier appraisal and CMA or not, often determines what the bank is willing to accept as a sale price in any transaction. The BPO may be internal or a drive-by, and may be done by a local agent or one from another area -- usually not by the listing agent -- which leaves some room for variation in how close an approximation to "market value" this number actually is.

So, which is "better"? Which of the three is more accurate?

I would argue that a well put together CMA is most likely to approximate "truth" as to what a motivated buyer would be willing to pay for a particular home in a given market at a particular point in time (but then I'm biased). However, even though I think a CMA would probably do a better job of providing a lender with necessary insight, there is of course some logic in lenders not relying on CMA's from listing agents as a guide (particularly with short sales), due to our obvious vested interest in seeing the property sell.

But, the question for me is . . . why do lenders often rely on appraisers / appraisals when lending money, and agents / BPO's when collecting on the debt?

Theoretically, appraisals are more detailed and accurate. They also cost more.  So is it that lenders are just going the more cost-effective route in saving $200-$300 by settling for a BPO, or do they feel there really is little difference between the two, and that either is sufficient?

If it's that a BPO is not as accurate, just cheaper, this would seem another example of "penny wise, pound foolish" within the financial sector. Selling an REO for thousands of dollars below where it should be, based on a low BPO, or losing a deal by holding to a BPO that comes in too high, makes the couple of hundred bucks in savings laughable.

If it's that an appraisal and BPO are pretty much the same thing in terms of effectiveness and reliability, and therefore interchangeable, would a BPO not then be sufficient for originating a new loan? The lender would still have confirmation from an independent 3rd party that there's a house there, worth somewhere close to the loan amount.

In my opinion, the over-reliance on BPO's and appraisals is problematic in its own right, but this inconsistent practice of depending on one source of valuation in the loaning of money and another source in the collection of that debt -- if that's what it is -- is one I'm interested in learning more about. 

Hopefully there are some veteran REO / short sale practitioners out there, or representatives from the lending side of the world, who can shed some light on this for me, or put me straight (gently) if I'm seeing it wrong. Who knows, maybe there's a logical explanation of which I'm unaware?...

It appears that the positive trend we had been seeing in Jasper GA home sales in the early part of the summer took a turn for the worse in August.

The number of homes placed under contract or sold, 24*, was 20% lower than August 2008, and 33% below 2007's numbers.  It also reflects a notable decline from the prior month's sales numbers. The average closed sale price of $219,072 for those transactions that have closed holds some promise on the pricing side of things, although still at a very low list-to-sale price ratio.

Of the 24 transactions, seven of the homes were located in either Bent Tree or Big Canoe. Eight were bank-owned foreclosures (33%).  This is compared with only five foreclosures sold in August for each of the two previous years, or, 17% and 14% of all sales, respectively, for 2008 and 2007.

Inventory continues to hover at an unfavorable two-years plus, with 531 homes for sale in Pickens County GA at the time of this writing. Twenty-seven of these active listings were listed as bank-owned or foreclosures -- a slight drop as an overall percentage of inventory over prior months.  With 30-40% of all homes that are selling being some form of distress sale, this drop is not surprising, but is also likely to be quickly replenished if the number of foreclosure notices being published is anything to go by.

This turnaround from the improvements we had been seeing is hard to explain, and makes predicting future trends almost impossible. September and October aren't showing significant signs of improvement, so the earlier gains may simply have been a release of pent up demand, and some bargain hunting by savvy buyers seeing great opportunities that met their needs.  Even the anticipated surge of first-time home buyers racing to meet the tax credit deadline hasn't been as great as many expected.

Overall it seems the mood of uncertainty about job security, unemployment, housing prices and the economy, seems to be holding in check any sustained turnaround in the local Pickens County housing market.

*Some data used herein obtained via First Multiple Listing Service and is not warranted.

Gorgeous, move-in ready new construction, in picturesque Madison Ridge subdivision in Jasper GA.  

This pristine home offers 3 bedrooms and 2.5 bathrooms, as well as a huge bonus room or fourth bedroom and full daylight basement that together provide abundant space.  The main level includes a spacious family room with fireplace, a separate living room and dining room, breakfast area, open kitchen, laundry room, half bathroom, and sizable master suite.   

The kitchen is open to the family room and breakfast area, creating generous space for entertaining and everyday use, while equally convenient to the formal dining room.  With hardwood floors, granite counters, tile backsplash, custom cabinets and stainless steel appliances (dishwasher, inset stovetop, microwave, and double-oven), this is a functional and inviting workspace with a touch of class.  

Likewise the master bedroom, complete with trey ceiling and ceiling fan, extends beyond functionality to indulgence, with separate his & hers closets, and a large private bathroom. A jetted tub with large window, private toilet stall, enclosed tile shower, and separate his & hers vanities, set this bathroom apart.  

Downstairs, the full basement is easily accessible from inside our outside, with an interior door and two exterior doors (including a double-door), several windows, and its own secondary deck overlooking the wooded back yard.

Outside, a landscaped 1.30 acre yard, sodded in front and wooded in back, assures room for outdoor activities, as do the two decks and covered front porch.  Concrete siding and architectural shingles add the finishing touches.  

The neighborhood of Madison Ridge is a small, quiet, relatively new community, with approximately 3/4 of available homes already occupied, and a number of acre-plus lots still available for additional development. Underground utilities, but no community amenities or HOA at this time.  

Location is a convenient mountain setting, roughly 3-miles off Hwy 515 in South Pickens County, just minutes from Jasper and Canton, GA.  

Don't miss out on the lowest priced home available for sale in the neighborhood, and a great opportunity on a quality home!      

Trent D Cluley Keller Williams Realty - Select Partners (678) 493-2100 TrentCluley@kw.com http://www.TrentCluley.com Listed by: Keller Williams Realty - Select Partners

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As hoped for and expected, July 2009 saw a notable improvement in house sales in Jasper GA, as compared to both prior year numbers, and prior month home sale numbers, for the Pickens County area.  And not by a small amount either.

Reported pending sales for July jumped 43%, to 30 homes placed under contract, from 21 in June '09 . . . and doubling from only 15in July 2008.  Equally significant is the fact that average sale price for those transactions that have already closed falls close to $226,000, versus an average sale price in June of closer to $184,000, and $187,000 for July 2008.  This suggests activity from some buyers looking in higher price ranges, which is good news for sellers. July's sales in fact top even sales volume for July 2007, which came in at 27 homes sold, but still trail the average sale price of $234,348. Sale price to list price ratio improved slightly as well, up to 91.5%. Still not a great ratio, but a good sign of improvement.

Bank-owned foreclosure homesaccounted for 11 of the pending sales (37%), while almost half of all houses under contract of sale were located in either Big Canoe or Bent Tree, GA.  These numbers highlight the difficulty for a non-institutional home seller in Pickens County that doesn't live in Bent Tree or Big Canoe -- particularly at the above $200,000 price point.

Anecdotally, some of the increased activity can be attributed to heightened interest from first time home buyers looking to take advantage of the federal and state tax credits, but exactly how much is attributable to this, is difficult to say.  Low home prices and interest rates are just as likely to have played a role.

Inventory is again up above 550 homes for sale, with the uptick in sales doing little to keep up with listings coming on market.  Foreclosure homes continue to account for around 7% of homes on the market, despite the high percentage of these REO properties that are sold each month relative to other sales.

So long as foreclosures keep inventory up and prices down, it is going to be a challenge to support any argument that a solid bottom has been reached, or a turning point found, but, even just maintaining where we are now -- with no further deterioration in volume or value -- can be viewed as something of a positive.  So we'll just have to wait and see where August's numbers come in and what they might tell us...

For more info about your local market, neighborhood or a specific home, feel free to email or call with your request.

[Data used herein obtained via First Multiple Listing Service and is believed accurate, but is not warranted.]

One of the things that has made the area around Jasper and Big Canoe, GA, particularly appealing to commuters and retirees, permanent and part time residents alike, is its central position in North Georgia, which affords convenient access to the rivers, lakes and mountains of the north and east, and the city life of Atlanta to the south.

Some of the attractions of Atlanta are obvious, with museums, parks, music venues, shopping and restaurants to suit just about any taste.  And of course there are the big draws like Six Flags over Georgia, and Atlanta's professional sports teams -- Hawks, Braves, Falcons, etc.

But, for those looking to avoid the large crowds and hefty prices at venues such as these, or perhaps something a little more "quaint" or different, there are other opportunities not too distant from Pickens County, GA, that can be taken advantage of in the summer months . . .

Each year in Jasper during the week of the Fourth of July, a small fair sets up in town at the Chamber of Commerce park, and includes rides, games and food, that is ideal for anyone with small children. An annual tradition looked forward to by many locals.

A little further afield, the minor league teams of the Rome Braves and Gwinnett Braves can be enjoyed for less than $20 per ticket, and most of the seats are pretty good compared to major league stadium seating.  The games also have a whole different feel and personality than the big leagues, with a more personal feel for youngsters.

Beginning in August of each year, the Atlanta Falcons hold their training camp in Flowery Branch, GA, which is free and open to the public, and only about an hour from Jasper.  Concessions are reasonably priced, and there are activities and giveaways for the kids, along with a chance to be at field level with the players and gather autopgraphs.  Well worth the trip.

 There are numerous other opportunities and activities in and around Pickens County, GA, but these are just some that come to mind as poignant at this time of year.  Will post more later.  (You can also read related posts on things to do in Jasper GA, on my other blog, CurbviewJasper.com.)

I will be glad to provide more info on these activities if needed.

Out of curiosity I pulled the numbers on home sales in Pickens County GA by neighborhood for the past year, to get a rough idea of which subdivisions, besides Bent Tree and Big Canoe, had seen the most activity for the time period. 

Bent Tree and Big Canoe were excluded as the two largest neighborhoods in the county, and therefore likely to always hold the top slots. Combined the two account for around 44% of all current listing inventory, and approximately 26% of all home sales  / pending sales over the past 12-months.  So, outside of Big Canoe and Bent Tree, here is how the neighborhoods stacked up by overall number of sales:

1) MADISON RIDGE - 9
2) ARBOR HILLS     - 8
    SALACOA HIGHLANDS - 8
3) SADDLE RIDGE - 6
4) HUNTER'S RIDGE - 5
    IVY RIDGE - 5
    WHISPERING WATERS - 5
5) PHILADELPHIA HEIGHTS - 3
    WILD TIMBER - 3
    WINCHESTER OAKS - 3
    CHIMNEY RIDGE - 3

All other communities had less than 3 sales each during this time period.  How much these numbers are affected by neighborhood characteristics and popularity versus lower prices or affordability is open to speculation, but it is most likely some combination of the two.  All areas experienced some level of foreclosure, short sale or other distress sale during this time, but, outside of Madison Ridge, most of these neighborhoods had solid sales activity prior to the price reductions that took place.  The lower prices simply came as a bonus.  

I expect to see the ranking hold or improve for some neighborhoods like Arbor Hills, Winchester Oaks, and Saddle Ridge, over the next 12-months, while others are likely to drop lower on the list, due more to reduced inventory than buyer demand. For example, Wild Timber and Madison Ridge have few homes left available for sale, relative to where they were a year or so ago (at least not at the prices buyers have gotten used to paying).  Of course, this is subject to the direction of the foreclosure and short sale trend in the coming months, which is something yet to be seen . . .

The Village at Oak Creek adds to Pickens County Georgia's mix of neighborhoods with a touch of luxury.

While the average sale price of homes in Pickens County is below $200,000, homes for sale in The Village at Oak Creek have an entry level in the low $500's.  These homes offer the size and style elements one would expect in the price range, with soaring ceilings, ornate cabinetry, elaborate trim and elegant stonework that makes each home a unique masterpiece for the discriminating buyer.

Few homes have made it to market -- only four have been listed in real estate to this point, ranging in price from $530,000 to $689,000.  The lowest priced of these houses was a bank owned foreclosure home previously listed at $665,000, before being repossessed by the bank and placed back on the market.  Individual lots are also available for buyers interested in building a home themselves.

Lot sizes are all from one acre to a little over two acres, with a gentle topography that ranges from level to rolling, and many of which benefit from pleasant mountain views.

Community amenities include sidewalks, a picturesque swimming pool with waterfall, a pavilion with fireplace, and lighted tennis courts -- one of the few subdivisions in the Pickens County area other than Big Canoe and Bent Tree to offer these types of features for residents.  Underground utilities include electric, public water, septic tank, phone, cable, hi-speed Internet, and gas.

Among the advantages of The Village at Oak Creek is its very convenient location, just a couple of miles west of Jasper off Highway 53 -- close to town and Highway 515, with the advantage of acre-plus lots to ensure some level of privacy in this quiet community. 

Although the price point is notably higher than for much of the sales in the county, for those intending a purchase in the range of $500,000 and up, The Village at Oak Creek allows luxury options outside of the larger gated communities.

For a complete email list of homes for sale in The Village at Oak Creek, more information on anyhomes or land for sale in Pickens County, GA, or daily email updates of price changes, foreclosures, and homes new to the market in The Village at Oak Creek, just send Send Us An Email with your request.  You can also use the Property Search feature to search Jasper Georgia homes for sale by neighborhood.

For newer homes on the west end of Pickens County GA, Black Knob Falls is a neighborhood similar in size, style and price point to comparable communities like Bethany Moorings and Saddle Ridge, but closer to Ranger and Fairmount than these developments in South Pickens.

There have been few recent home sales in Black Knob Falls to provide up to date home sale price averages, but for the past couple of years, the average has been around $150,000.  By contrast, the average list for the three homes currently on the market is only $147,600 (in a broad range from $130,000 to $179,900).  Some foreclosure and short sale activity has been behind the downward movement in prices.

The homes were all built within the past six-years or so, and offer standard features found in most homes in this price range and style.  Frame construction with vinyl siding (some with concrete siding), basements, a deck and/or porch, and acre-plus lots.  Interiors include wall-to-wall carpeting, laminated countertops, master suite with private bath, laundry, fireplace and more.  Several of the homes have the garage located on the main level and offer all main level living, versus the drive under garages, split level, and multi-story layout often found in other neighborhoods.

A homeowner's association, streetlights, and underground utilities are some of the benefits of the neighborhood, along with pleasant mountain views.  Association dues were $100 a year, as of this writing. Utilities provided include electric, phone, cable, hi-speed Internet, public water and septic tank for sewer.

Situated on Black Knob Church Road, off Highway 53 West in the Hinton / Ranger area, Black Knob Falls is equally convenient to Jasper and Fairmount, in an area likely to see growth in years to come.  Overall, an option to keep in mind for anyone looking to keep a home purchase under $170,000, in a quiet community, off the beaten path.

For a complete email list of homes for sale in Black Knob Falls, more information on anyhomes or land for sale in Pickens County, GA, or daily email updates of price changes, foreclosures, and homes new to the market in Black Knob Falls, just send Send Us An Email with your request.  You can also use the Property Search feature to search Jasper Georgia homes for sale by neighborhood.