If you are doing or will be doing short sale -- give this some thought. Came from a City Residential Loss Mitigation Representative.

I spoke to a City Residential Loss Mitigation rep and she told me that she uses a different approach that most on how to work her short sale inquiries.  When I heard it, it sounded like it was putting the cart before the horse.  Appraisal before the offer or short sale request.... But what do you think? 

When she get that request for short sale requirements, she ask if the owner would like to do an appraisal.  If they say yes, the charge will be added to the fees to the loan.  Her purpose for doing an appraisal at the beginning is that she will know what the house is worth ahead of time.  She will work with the real estate agent in making sure the home is priced right.  Once she get the appraisal, she will know what the property is worth as well.

One of the rules that I was not aware of:  Lenders or at least City Residential can only order a BPO every 90 days.  So they pretty much have to use what they have on the last BPO unless the agent present comps that can clearly show that the BPO that they have is outdated as far as value goes.

And upon an agreed timeframe she will check back with the real estate agent to have them check the comps and they will decide together if the price should be lowed on the property.  Once an offer comes in, it is will be pretty clear as to how close to the FMV the offer is and she will not have to waste the time waiting on a BPO and then deciding if she will approve or deny the short sale request.

Do you see a benefit in using this method or do  you see this as a disadvantage?  Have you had to work your short sales like with any other lender?

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