RaytheRealtor
Licensed Real Estate Agent
Hopedale, MA
August 03, 2010
How do you counter a bad BPO?
I get so angry with the weight the lenders (servicers) put on BPOs. They take them to be the "real" true price, and a point from where to negotiate. I try to point out that BPOs are generally done by newbie, or part time agents who need the money and are willing to put in 4-6 hours of work for $50 to $100. They are generally not that qualified to accurately determine the market value of a home. But yet, the lenders believe them as representing the true value of a home.
I'm negotiating a short sale listing where the home, in a good location, would be worth about $280k. But this home was built on a back lot which is right at the top of a V-E-R-Y busy "T" intersection, separated by a short fence and weed foliage. Also, it's drive way is a narrow right-of-way between the other homes, And right near the garage, which is under the home, there is a short steep hill, leaving about 1 car length to the garage. In the winter, you just don't drive down the hill until the snow melts.
The buyer we have is handicapped, doesn't drive and wants to be close to a busy street for a short walk to public transportation. It's remarkable that we found this buyer.
My market analysis for the home comes to $232k, but considering the market condition, may have degraded since then. The current offer on the table started at $230k (first placed on 2/3/2009) and has been worked up to $235k - $242k - $244k... same buyer hanging in there.
The BPOs have been, from what I could determine, $290k, mid $240's and the most recent, $280k. The $240k one was done by a more senior agent who has made a business of doing BPOs.
There is a lot more to this short sale but the main question is, how do you counter a bad BPO? At one point I hired an agent who does a lot of BPOs to do one for this home. It came out to be around $240k. I sent it in but is seemed to make no difference.
San Diego, CA
August 03, 2010
Ray, which bank are you dealing with?
I've had to counter quite a few bad BPOs. I've emailed pictures of defects and repairs, contractor's estimates, CMAs, actual formal appraisal reports done by a licensed appraiser (on occasions the buyer was willing to put up the cost for an appraisal), letter of explanations, ANYTHING that could help convince them that you know that specific area and the home more than the BPO agent does. I don't know about your area, but BPO agents in our area take a maximum of 10 minutes to do a BPO. I had a BPO done just last week and the agent sent a photographer! She didn't even come out herself!
In all occasions, I've had the banks come down significantly on their demand, but it still was a little higher than the original purchase offer.
RaytheRealtor
Licensed Real Estate Agent
Hopedale, MA
August 03, 2010
The bank is Bank of America. I've sent a BPO, aerial photos from Zillow, Photos for the driveway. And all the comments from the showing agents, most of which cited the location as the problem.
This short sale is complicated. Last week we were close to investor submission. The negotiator needed updated seller financials by 7/30. On 7/28 I got a denial of the SS due to not having submitted the offer and HUD1 within the 14 days given. WTF.. those docs went in last November. Called the negotiator who said oops, I made a mistake. Just reinitiate the short sale and we'll walk it through.
Reinitiate means start back from square one. By Sat I have everything submitted. I have a whole new team now negotiating, with no history.
I've asked the former negotiator to intercede but he hasn't.
The latest counter from the lender drops the sale price to $270k. Their note says "I have given a little break on the offer amount but this is the final lowest we will go to net."
It's still way over the market value of the home ($232k) and the final offer we have in hand ($244k).
I'm hesitant to counter back again at the same price without getting the negotiator to understand that his BPO is way off. If I do, then we may just get denied, and there goes 18 months of work down the tubes, let alone screwing the seller, buyer and investors, just because of a bad BPO.
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