BPO or Brokers Price Opinion. What does that mean to my short sale deal?
Question: “Thanks for the quick Response, Jonathan. No pun intended… Wanted to check with you if the BPO would shatter our Short Sale possibility. Apparently, I was reading a couple of articles on the internet that said the BPO is something that Realtors do on behalf of the Lender but with minimal dedication and/or sincerity. Whatever they quote is the Final price for the lender and that might create havoc to our Short sale. I am NOT getting worked up about this but wanted to run it through to hear your comments on it. All said and done, you know better and you also understand how badly we need this Short Sale to be done effectively and as quickly as possible.”
Answer:
The information you read is correct. The BPO can many times be the death of a real estate deal. Its unavoidable and needs to be completed in the process. At times when done by an agent that real estate agent thinks that they will get the listing on the backend (post-foreclosure or REO/Real Estate Owned Bank Portfolio side of the deal). This, generally, is not the case but seems to really be an urban legend in the real estate market. We have found many work arounds for these in the many deals but the Banks do take these reports into consideration and a valuation in our favor many times can tilt the deal in our favor just as much as a valuation in the other direction can really hurt us. Once the BPO is ordered we will take on dealing with the agent/appraiser that will come out to the property.
All Lenders including: JP Morgan Chase, Countrywide, Citi Group, Citi Financial, EMC, America’s Servicing Company (ASC), etc. Order BPOs for their investors of which the loans they service. That is how they estimate what the property is worth. Dealing directly with the party that facilitates this value for the lender can at times be crucial to the turn out of your short sale. We recommend you have your real estate professional speak to this person that comes to value the property as they too will be a real estate professional. We have properly dealt with these types of agents in many cases and find that one of their first questions is about the offer that is being made and what that offer has come in at.
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