This is the most crucial part of the short sale. EVERYTHING HINGES ON THE BPO - NO EXCEPTIONS.
There are two types of BPO. Interior and exterior.
Usually the lender just prior to the filing of a foreclosure proceeding has already ordered the exterior BPO or drive-by BPO. The Mitigator has this report in his file already. Ask them if they have this already just to confirm.
DO NOT negotiate with the lender(s) based on an exterior BPO. Insist that they need to conduct an interior BPO in order to get a true value of the property. Exterior BPO's usually come in at a higher value. The only way to validate your offer is through an interior BPO.
One thing to keep in mind is that a house is only worth what someone is willing to pay for it. BPO's and appraisals are all opinions of what the house is worth but in today's market that does not equal what someone is willing to pay, so it is your job to work hard with the Mitigator to get your offer accepted.
When the lender orders a BPO make sure that you are the contact for the company to gain access to the property. Always, always meet the person doing the BPO. This will give you an opportunity to talk with them regarding the property but there are some rules that you need to follow.
When I first started doing this business I was the typical investor that thought I knew it all and could impress the BPO person. I would show up in my convertible, over dress, bring comps, talk my head off and usually get the agent or appraiser upset. I learned very quickly that this was not a good thing.
Do not act like a hot shot Realtor that knows everything. Always show up on time, be polite and give them the following paperwork:
· Copy of the Purchase Agreement
· Estimate of repairs if applicable
· Copy of the hardship letter
Give them to the Appraiser or Agent on arrival and briefly explain what they are and that you are giving it to them for information purposes only. Most agents and appraisers do not know why they are at the property so it does help to enlighten them to the situation, without being too pushy.
BPO agents and appraisers usually just want to get in and get out because they are not being paid much to do this. If the person is one that wants to talk, then talk. If they are make it clear that they don't want to talk, then just give them the paperwork and let them do their job. Just answer the questions they have and move on. If the property has a Homeowners Association make sure you know the monthly or quarterly fees. This saves them some research. Do not follow them around the property pointing out all the flaws. Your estimate of repairs will show them what needs to be done.
NEVER EVER try to strike up a deal with the BPO Agent or Appraiser to try and get the number you want. It can lead to a road that you do not want to travel regarding either them wanting your listing or a monetary exchange. IT IS NOT WORTH IT.
If an Agent or Appraiser even suggests this to you, explain that you are the listing agent and that you do not require their services. Never commit to anything that could be a conflict of interest.
Always conduct your business in a legal and ethical manner.
Remember, present your facts to the Agent or Appraiser, and let the appointment flow naturally. DO NOT force any issue. By learning how to validate the offer you can put yourself in a great position for success. You cannot control the Appraiser or Agents decision or the market, so don't even try.