One Property. Two BPOs. One at $59,000. One at $149,900. WTF?
Hi folks. If you handle Short Sales then you know the importance of the BPO (Broker price opinion). Lenders heavily rely on the opinion of a neutral agent when it comes to placing a value on the short sale property. So it's important that the agent doing the BPO is accurate.
Of course we all know that this is not always the case. Some BPO agents are good at what they do and some suck.
Yesterday I was doing my weekly follow up on a Short Sale file. This particular Florida Short Sale has two liens on it so two BPOs were done last week. As usual when I speak to the lenders I "make nice" with my goal being to get as much information as I can about the file. I was able to get both lender representatives to give me the BPO values.
This particular property was placed on the market priced at $85,000 and a purchase price of $87,750 was negotiated. This purchase price was spot on with recent comparable property sales so I figured there would be no issue at with the BPOs.
Ok are you ready for this? The BPO for the 1st lien came in at $59,000. The BPO for the 2nd lien came in at.............$149,900!!!!!
Is that comical or what? One property. Two different values. How can there be a $90,000 difference from one BPO to another on a property only worth $87,000? Maybe lenders need to get smart and pay the extra cost to have a full blown appraisal done.
****If you want to learn how to dispute bad BPOs then be sure to join us for Short Sale Superstars Advanced Short Sale Training. We'd love to have you.
Replies to This Discussion
-
Permalink Reply by DAVID REEVE on
-
It seems that the lenders themselves have GIGO! Computer talk for "Garbage In--Garbage Out" if you put bogus information in, you will certainly get bogus information out! PNC recently stated that a deal we had "came in" on the BPO figure of around $147,000 for a fresh water canal home in Cape Coral. However, the PMI company has "THEIR OWN FORMULA FOR VALUE" (LOL) (MORE GIGO) and the pmi demands $316,000 in a $147,0000 market. It is no wanter that the bean counters at the bank are causing the banks to placed under receivership! We are checking the FDIC watch list in hopes they will take over PNC so we can get the job done. We got the same story on 4 different units at PNC. In the case of the 2 BPOs,
YOU SHOULD DEMAND THEY GET A LICENSED APPRAISER. Not a Realtor by day and Bartender by night type of person that really doesn't know the market.
-
Permalink Reply by Richard Zaretsky on
-
We had one where the bpo of the second was double the bpo of the first. We had to sleuth about, but found the 2nd's bpo got its info from the tax assessor office. The tax assessor office had made an error in the calculation of the size of the house and - DOUBLED the size! Problem solved - case closed!
-
Permalink Reply by Jennifer Williams on
-
Unfortunately I have had the same happen with appraisals. I have a property that I am trying to sell in Michigan, fair market, no short sale and it is a unique property in that it is one of the original homes (completely renovated) on 2 acres with a huge pole barn in an area of new homes in subdivisions on small lots. I have been a Realtor there for 12 years or so but have moved out of state and am trying to deal with this from 900 miles away. The buyer agreed to pay $125,000 and we had an appraisal done--the 1st appraisal came in at $105,000. So, although I didn't think it was accurate, we agreed to settle at that price. However, after 6 months, we still didn't have the deal done due to circumstances beyond our control. So, when we were able to get going again we had to do another appraisal--this one came in at $66,000! When I was able to review the appraisal, I found that our home was being compared to REO properties in old subdivisions with reputations for foundation problems, among other things. Other comps were pulled from urban areas that were absolutely not comparable to the suburban area where the home is located! I appealed the appraisal and pulled my own more relevant and comparable sales and listings, however, I am not surprised that I have not heard a response--the appeal was in May. The appraisers, and I mean no offense to any appraisers out there, have no reason to come in at any particular value as they are paid in advance and can simply ignore you because you (as a buyer or seller) really have no recourse. I believe that this appraiser took a look at the age of the property and immediately formed an incorrect opinion as to value--in other words, because there are so many brand new homes selling for what we were looking to get, our home could not be worth as much as those. He found the cheapest REO properties in the area, claimed that they were comps and called it good. What's worse is that the buyer has spent nearly $1000 for garbage--one person's lazy attitude and faulty opinion has killed this deal. It is extremely frustrating--especially for buyers and sellers who do not understand the real estate business.
-
Permalink Reply by Jackie W. McDermott on
-
I feel your pain. As an Arizona Realtor, we have discussed this issue in our neck of the woods. If you can, BEFORE allowing the appraiser into any property (remove lockbox), so they will have to call you for the appointment. Then you can interview the appraiser. If he/she is not familiar with your specific neighborhood (ask where they live, how long they've been appraising, are they employed full-time), and if you don't like the answers, call the AMC or bank and demand a different appraiser. When you meet the appraiser, give them the comps, and your support of them. This has actually worked here.
In the meantime, enjoy your LIONS!
-
-
Thanks, that is great advice! I tried to interview the appraiser by phone but had no luck and was told that I could not have any contact with him...I will definitely meet him at the house next time (and probably for all future appraisals)!
-
Permalink Reply by Elizabeth Meyer on
-
Jackie-I was going to post almost the exact same reply. I remove the LB once I have an offer in and force the BPO agent to call me. I don't interview them, but I do always meet them at the house and give them my comps. I have never had a BPO come in too high since employing this tactic!
-
Permalink Reply by Dennis Smith on
-
On another SS forum, the negotiator showed up at the BPO where the BPO agent boasted of doing 150 a month. He actually stated he does all of them very high so he has a better chance of getting the property as an REO. Unfortunately for him, there was a witness there who sits on the Ethics Board of this association.
The agents told the bank and the bank did a full appraisal which came in at sales price. The BPO agent is being investigated by the bank and the association YEAH!!!!!!
-
Permalink Reply by Kristen Hanson on
-
I have a HAFA Fannie Mae short sale through BofA & AMS Servicing that did a BPO (only one was done) to determine the list price and they came back with $102,000. Since we had an offer in at $225,000 they figured something was wrong and found (after months) that the wrong BPO was attached to the file. They then sent me the new listing agreement at $657,000 when they had given me a verbal price of $225,000 which was an accurate market value at the time. I of course sent it back but by the time I got the correct amount, it was five months later and the BPO was expired and the buyer walked. However, they still issued a list price agreement of $225,000 good for 120 days. When another offer was submitted for the list price AMS Servicing said Fannie Mae would not honor it because the BPO was then 8 months old. What do you think I was telling them for the last six months? So much for them setting the list price and giving you an answer in 10 days. I had to go to Fannie directly to get them working on this and hope to have a resolution on this this week. A new appraisal was done over three weeks ago and AMS has yet to find it :( .
-
Permalink Reply by Scott Taylor on
-
The amazingly obvious display of inefficiency abounds in almost every short sale dept. I work with from B.P.O's and every other process down the line. REO's are no different. You wouldn't believe this new BofA REO listing I just got, complete chaos. We agents know that these glaring inefficiencies are costing the banks millions of dollars which in turn costs taxpayers of course. They should hire an agent like you or I to go in and straiten up thier departments!!! If I didn't lovvvvvve my job so much I'd volunteer, *lies*.
-
Permalink Reply by Pamela Lester on
-
Oh don't even get me going!!!!!!!! I listesd a house for $92K, had two full price offers on it. The seller accpeted one. The appraisal was done shortly thereafter and came in at $80K. I kid you not! The appraiser then wouldn't use any of the comps I sent her. We killed the deal, put the house back on the market for $92K and yup, the next day we had two more full price offers. We accepted one of the offers and the appraisal was done. You guessed it, it appraised full price for $92K only two weeks after the first appraisal of $80K. Here is a trick which has works MOST of the time... As soon as we have an offer on one of our properties, we pull off the lock box and put on a contractor box. Then appraisers and BPO agents must call us so we can get their name and number. It also gives us time to talk with them and perhaps offer to supply comps, tell them issues they can't readily see, advise of multiple offers etc......
-
Permalink Reply by Michael Schneider on
-
Can't really be. Someone is smoking something. Maybe someone went to the wrong house?
I find I generally have better luck with a BPO. It's the FHA full appraisals and the FHA's inability to manage value that causes most of my DILs. Not BPOs.
-
Permalink Reply by Kathy Denworth on
-
I do a LOT of BPO's and am sad to say I have seen agents and Sellers representitives trying to drastically undervalue properties. I had one recently that was "listed" $350K under the market price for the area. Can you believe they listed a 4300 sq ft home on the water in the Keys on a 10,000 sq ft lot for $799K? "They" provided me with a copy of the contract and wanted to be present when I did the interior BPO to point out "problems" with the property. Sure, there were some issues, but you could rebuild the whole house for the difference in market value and what they wanted to sell it for.
I steak my reputation on doing BPO's to the best of my ability. I know my area, I know the properties and I will tell the truth.
© 2024 Created by Short Sale Superstars LLC.
Powered by
**********************************
like buttons