Banks are as Blind as Bats; Especially When They do Short Sales. (Part 1 of 2)

"On my income tax 1040, it says, ‘Check this box if you are blind.' I wanted to put a check mark about three inches away."

-Tom Lehrer (blind comedian)

Think of the bank as a blind guy (not quite as funny as Tom Lehrer) who needs a guide to help him see the true market value of the house you have listed as a short sale.  That guide is the BPO agent.  They tell the lender what a property is worth, and, therefore, tell them what they should accept on a short sale.  Sometimes I might refert to this as the blind leading the blind.  If a BPO is off, then the short sale is going to be off.  If a BPO is too high, there are going to be counter offers and declines on that short sale. 

Lately, I've seen quite a few BPOs come in significantly higher than the offers being negotiated.  There are ways to avoid that.

A good BPO begins with a good walkthrough.  Make sure you, or someone from your office who is trained, actually meets the BPO agent at the property.

Would the BPO agent rather go through the property alone? 

Yep.  They would.  They would much rather not have to worry about coordinating with you, but that would not be in the best interest of your seller or your commission. 

This is critical.  When the BPO agent goes through the property with you, your presence accomplishes the following:

1. It helps achieve a level of accountability for the BPO agent.  This is important because some BPO agents can get the listing back as an REO if it doesn't sell through the short sale.  (This seems like a conflict of interest to me)
2. It allows you to interact with the BPO agent.
3. It builds rapport and relationship with them.
4. It helps them to access the property with input from you.  You can point out the things they might not be able to see with a cursory look at the home.  You've spent time examining the property inside and out.  You can help them see what you've seen.
5. You can physically hand them the BPO package, which you should have prepared earlier in the process so that when the BPO happens, you have it ready for them.

Want to make sure you are there when the BPO is done? 

Make yourself indispensable when it comes to the BPO agent's having access to the property. 

BPO agents are busy people.  If there is any way possible they can get into the property without you, they will. 

So, take your lockbox off.  If you don't want to have the key in your office, put a keypad lockbox on the property.  They'll have to call you for the combination.  That gives you the opportunity you need to set up a time to meet them there. 

Note: In module 5 of our short sale training we discuss the principles of BPOs in greater depth.  We actually call this module The BPO Factor.  If you are curious, check out the training details at this link: 

http://www.allianceshortsales.com/training/details/details.html

In part 2:  What if the BPO comes in high?  Learn some advanced strategies to help build your case to the lender and get an approval.