Full Appraisal vs. BPO
Apologies if this has been asked before, but I couldn't find anything on this question using the forum search.
I recently heard from my agent that the BPO had been scheduled on the property we have an offer pending on. When I spoke to her after the review took place, she told me that what was done was actually a "full" appraisal. A licensed appraiser came out to the house and spent about 1.5 hours doing his review. He told the agent that he was being paid $350 for the appraisal, a much bigger investment of someone's money than a $50 or $100 BPO.
Don't know if it matters, but there is MI on this property and MI was the hold-up on the first offer going through. Aurora is servicer, seller's rep refuses to disclose investor, don't know who the mortgage insurer is.
At this point, I've given up trying to estimate how anything, including this, might affect our offer or timing. I'm just genuinely curious about the reasons that a servicer or investor might choose to do a full appraisal as opposed to a cheaper, quicker BPO. Thanks.
Replies to This Discussion
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Permalink Reply by Marc Celeste on
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There may be a number of reasons, but if the servicer pulls an AVM and perform a quick analysis, they may order a full appraisal to substantiate their findings. Time and money are not of real concern, when ultimately it may be the difference between 20k-50k, so whats an extra $250? Its all relative. This shouldn't not have an affect on your timing, an appraisal should be complete within 5 business days (depending on the market). Im curious why an appraiser would take 1.5 hours?
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Permalink Reply by Jeff Payne on
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I would much rather prefer an appraiser do the job. I hope your agent met the appraiser at the house.....
As far as fees, BPOs cost much more than $100.00. The agent doing the BPO is doing it for a management company that hires the agent. I have seen full cost of BPOS as much as $350.00 and the agent gets $40 to $60 of that. Occasionally the negotiators will upload the wrong docs and we get to see what is really being charged. I have seen a rekey cost $750.00 and the guy doing the job only got $125.00
A servicer would choose an appraisal if they are concerned about getting a real evaluation and not one completed by an agent that just recieved their license
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Thanks for the info. I forgot to mention that ours is the second offer on the property, and a BPO was done the first time. The agent met both the person who did the BPO last time and the appraiser this time.
The agent said the BPO took less than 15 minutes; the woman just came in, took a bunch of pictures and left. The appraiser measured rooms, reviewed all the mechanicals (it's a rural property with septic and well, as well as dual zone AC/heat, so there are 2 sets of those to check), took photos, made drawings, etc. The agent provided him with some information on comps. The appraiser also requested the first and last pages of the contract, so he could see the dates it was signed to do some sort of adjustment based on the time that's elapsed since we put the offer in.
The agent wasn't very impressed with the person who did the BPO, but she was pleased that the appraiser seemed to be more thorough. And since he's licensed (we're in NJ), perhaps there's a different standard that he is obligated to live up to to maintain his credentials. I figure that someone (servicer or investor) is trying to get a better handle on what they'd likely get at a foreclosure auction than they might get from a BPO. That might be bad for us, because the owner continues to maintain the house well, which might bring a higher amount at an auction.
Thanks again.
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