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BPO or Brokers Price Opinion. What does that mean to my short sale deal?

Reblogger
Managing Real Estate Broker with Maxus Realty Group of Samson Properties Broker - Realtor - CEO

 

The BPO can make or break a short sale

It is a crucial part for a successful short sale

 

Original content by Jonathan Katz

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.

Comments (4)

Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Real Estate Agents - Luxury - Divorce

This can make a difference...twice we had "interesting" experiences...once when the agent was newly licensed and not from the area...didn't read the inspection reports and estimates for repairs....sooo...of course was way tooooo high...and another just the opposite of what the lender had decided was right....and agreed with us...the price WAS right...and the buyers had to lower the price...

May 09, 2010 12:26 AM
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

The BPO can kill the deal or at least delay it as you find a work around for wrong value.  Meeting with the person doing the BPO is important.

May 09, 2010 10:20 AM
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

The most important and absolute must thing the listing agent has to do..... Is be there for the interior short sale bpo inspectios. As a listing agent you have gone through the different steps of listing, getting an offer, negotiating and getting the bank to look at your short sale, getting the value is teh most important thing. As the listing agent you need to inform the agent completing the bpo any problems, damage etc along with estimates on how much to fix or cure them. As well you want to point out how you came up with your asking price and give evidence why you think the value is what you think it is. By sending an agent in blind you are not helping your own cause.

The myth that a bpo agent doesnt care is false. BPO's are both income and a way to get REO Listings. You may not know but bpos' are scored or rated and that score determines if you are getting more bpo's or if it is your turn to get the banks next listing or not. So teh bpo agent needs to come up with a the correct value and the correct assumptions based on the facts in front of them. I am not saying there are agents who fly through these and dont care, but us agent who use bpo's as a business model to earn more income on our down time and earn the respect and scores to get mor elistings, take bpo's very seriously.

So the listing agent needs to be serious and see the short sale through to the end. I have been sent to countless homes alone without any information from the listing agent anhd when i get there, i get bomboarded with hate from teh seller who is losing their home to a short sale at no fault of mine. I didnt make them not pay their mortgage afterall.  Agents need to realize attending the short  sale bpo inspection is one of the most important things in the short sale process.

 

May 10, 2010 04:52 AM
Anonymous
penelope

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Jun 01, 2010 07:25 PM
#4