Education & Training with Florida Luxury Homes Inc.

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.

Comments (7)

Bryan Washington
Keller Williams Realty, Eugene & Springfield - Eugene, OR

Short sales can make you a lot of money, it just takes patience and a lot of due dilligence.

I just completed one and I've got a referral base from that client for life.

Jan 21, 2008 02:31 PM
Mott Marvin Kornicki
Waterway Realtors® • Notary Public & Apostille - Sunny Isles, FL
Miami Notary & Apostille 786-229-7999
Very good information. Much like trying to bribe or infuence an appraiser. It's just unethical and degrading. Let the BPO take on its own course and sit back!
Jan 21, 2008 02:40 PM
Renée Donohue~Home Photography
Savvy Home Pix - Allegan, MI
Western Michigan Real Estate Photographer

Great advice!  Many short sale agents here go to seminars where they tell them to brush off the BPO.  No BPO=No Deal Closed.  Too many do not understand the entire process and kill their own deals because of some "guru" who told them to not allow them to get in.


Jan 22, 2008 12:12 AM
Maria Peace

I had this thought about BPO's:  If an unethical agent does BPO's for short sales, but gets the listing if it forecloses, isn't it conceivable that they might inflate the price to prevent the property from selling, then blame the declining market once it forecloses.  I see the potential for BPO agents impeding the short sale process so that it goes to foreclosure, they get the listing, and then a commission.  I think it is a conflict of interest.  Could this perhaps be why short sales are so difficult?  Think about it:  it is in the lender's best interest to not foreclose and do a short sale, but perhaps not for the other middlemen involved who stand to make more money in fees or commissions if it goes thru foreclosure.  I wonder if I am  encountering this situation in a current short sale negotiation in which a very generous offer was turned down by the bank?  How would you get around this type of situation?  I don't want to make accusations, but I am keeping my eyes on this person because I had an ethics issue with them several years ago.  Any ideas/feedback would be greatly appreciated.

Apr 23, 2008 06:03 AM
Gary Ross

Well Yes Maria, I could see where where that was a possability. And unfortunatly there are are some Agents out there that are unethical. However, in our area and others, most of the Brokers that actually do the BPOs do not get the listing after foreclosure anyway. 

Each bank is different, so I will use Citi Mortage for example;

Citi uses Keystone Asset (and Im sure some others) to handle the property marketing, clean up, ect.

Keystone has a very detailed and strict program for the listing Brokers to even get a listing for one of there REOs.

And they are very clear about not having coflicts of intrest with contractors, or other Brokers.

Usually, when the bank orders a BPO for a Short Sale, they do from a random list of Brokers in the area.

In the REO business, an unethical Broker/Agent would generally be uncovered rather quickly by the Bank or their Managment Companys.

Unfortuantly, the banks turn down, what would seem to be great offers all of the time. There are so many factors, and they seem to change weekly now.

Ive been told by a Mitigator that now works for us, that her previous employer would automatically turn down any short sale offer.

So dont give up. Call the Mitigator, and state your case.





 My company deals with

Apr 23, 2008 07:02 AM
Maria Peace
Thanks, great advice.  I will try that next time.
Apr 23, 2008 01:41 PM
Debbie Redditt
Prudential Florida - Palm City, FL

Great advice.  Handling of short sales is a lesson in perserverance at best!  However, if you continue to do the follow up, and are consistant with the loss mitigator, usually you can get the deal closed.   When you get a BPO that is out of line, discuss it with the LM or AM--show them supporting documentation to prove that the offer they have in their hand is the highest and best that they will be getting in this market.  

Jan 29, 2009 11:42 AM