Short Sales: What is a BPO and why does it matter on a short sale?

By
Real Estate Agent with RE/MAX Action
IL – Some agents hate short sales. Why? Because they don't understand them. So, don't believe them when they tell you that short sales are impossible. I will explain what causes their problems in today's post. There are two things you must understand if you are doing short sales. They are BPOs and HUD-1s. A BPO is what the short sale lender uses to determine the value of the property. Discover how other sellers successfully did a short sale to avoid foreclosure by clicking here. BPO stands for "Broker's Price Opinion." They are what another real estate agent (Broker) thinks a property is worth. Basically the agent gives their opinion of the value of the property. "I think it is worth 300k", they put on the report. Lenders accept or reject short sale offers based on the BPO value. If the agent has given a value of 300k, then a short sale lender will not accept a sales price of 250k. The problem is that, in my opinion, sometimes the values are inaccurate. I have seen agents drive 50 miles away to evaluate a property. They go to a place where they do not sell real estate. As a result they are not familiar with the local marketplace. Because of this I always try to meet the agent doing the BPO at the property. I explain the market value to them and tell them what is happening with the property. I explain exactly why the property is selling for the sale price. I tell them what buyers have said about the property and why it isn't selling for a higher price. This helps them to give an accurate value. The lender gets an accurate value and is able to make a better decision on the short sale. Thinking about a short sale? I can help you short sale your property and never pay the bank another penny. Send me an e-mail at dtoomey@remax.net. I will contact you for a free consultation. When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at (847) 338-0180 Discover how other sellers successfully completed a short sale and request a free consultation by clicking here. Thinking about a loan modification? Our loan modification kit has the instructions you will need to get a loan modification approved with your bank. Click here to request a copy. Thanks for reading this, Dennis Toomey. Dennis is a Real Estate Broker at RE/MAX Action. Short Sales Realtor: Phone: (847) 338-0180. dtoomey@remax.net. For Real Estate that's hassle free, just pick up the phone and leave it TOoMEy! View My homes for sale at www.HouseByZip.com. Dennis Toomey specializes in loan modification assistance and short sales in Elgin Illinois. Elgin Loan Modification Help, Elgin Short Sales. Elgin Short Sale Realtor IL Short Sales. Realtor. Copyright 2010 SFI Marketing Institute, LLC. All Rights Reserved. Important Notice Dennis Toomey, RE/MAX Action, and the Stop Foreclosure Institute are not affiliated in any way, shape, or form with the government. Our services have not been reviewed or endorse by the government or your lender. Most lenders willingly work with agents on short sales. Why? Because most short sales are beneficial to a lender. If you accept our offer to help you on a short sale, your lender may not agree to a short sale or to modify your loan. We do offer a loan modification kit. However, the likelihood of negotiating a modification is like everything else in life. It takes work and persistence to convince your lender to modify your loan. No matter what you or we do, your lender may not approve a loan modification. We do not recommend that you stop paying your mortgage, because this will cause damage to your credit and could cause you to lose your home. Because we know avoiding foreclosure is so important to any homeowner, we recommend that you speak with the appropriate legal or tax advisor before making any decision. This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing. You have the option to reject a short sale or loan modification from your lender if it does not meet your approval. If you decide not to go thru with the short sale, then you do not have to pay us our fee. We normally make a real estate sales commission for helping you on a short sale. The views expressed here are Toomey's personal views and do not reflect the views of RE/MAX Action. This information on Short Sales: What is a BPO and why does it matter on a short sale? is provided as a courtesy to our viewers to help them make informed decisions.
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Rainer
143,951
Indera Coggins
Re/Max 100 - Dunkirk, MD

Dennis, this is truly a great post.

I don't understand why a bank sometimes choose to stick with the BPO price vs the appraiser price. I've had that happen to me whereas the bank decided that they will stick to the BPO. Come on, some agents don't even take the time to do a proper BPO because they only do a drive by.

 

Feb 28, 2011 06:18 AM #1
Rainer
26,626
Jon Elshaug
Sinacore & Associates - Fallbrook, CA
Independent REALTOR 760.390.8396 - USMC (Ret)

Dennis,

I do a lot of BPOs in the SoCal area.  Have I had agents do exactly what you've done, sure.  Did I appreciate all the hard work they went thru to pull comps and in color format. Yes I did, but I always slice them up into four by five pieces of note paper without looking at them.  Why, very simply it says on all instructions for a BPO, "arms length" Not that the agent doesn't know the market, well they live and work in Irvine, CA  sixty miles away and I'm three miles from the property oh yes there in fact short sale mills that want a quick commission. If an agent needs to be schooled on the area they are doing a BPO on.  They shouldn't be there.  A little extra information two drive by bpos beside the one you submitted as you represent your client are done before the short sale is considered and than an interior when things start to pop.

 

Take Care,

Jon

Feb 28, 2011 06:32 AM #2
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