Replies to This Discussion

Permalink Reply by Jeff Payne on December 27, 2010 at 10:27am

I think you have a long way to go on this one.  Your appraisal says $219,000 and the buyer will only go to $200,000.  Just playing devils advocate but why would OCWEN take $200,000 if it is worth $219,000.  Tough part is even convincing them it is worth $219,000  if the BPO came in at $285,000.  Did you meet the agent at the property when they did the  BPO?

Choose your escalation battles wisely, especially when the buyer is still off by $19,000 before expenses..... 

Just my thoughts but low ball offers tend to end badly :(

Permalink Reply by Thom Colby CA Brkr 888-391-5245 on December 27, 2010 at 10:46am

Jeff -

Help me understand.....  "Had an independent appraisal done which came in at 219K"  but your offer is $200K !  The buyer needs to understand that just because it's a short sale, does not mean the bank will give it away.  Since you're not even close, I would ask the negotiator what comps were used and provide your own comps for OCWEN to consider.  As Jeff Payne said, choose your battles carefully.  Your not even in the same city, let alone the same ballpark, or the same team at this point.

 

Since the Buyer originally offered $160K, they are obviously looking for a "fire sale".  The buyer needs to get realistic about true market value.

 

Best of luck,

Thom Colby

Broker

Newport Beach CA

Permalink Reply by Jeff Ogren on December 27, 2010 at 10:49am

Jeff- Thanks for the quick response- Does Ocwen usually hold out for the appraised value or BPO? I would think they would negotiate somewhat. If I could get the buyer up to 219k do you think I would fare better? How do I find out how they arrived at the 285k price? I did not meet the agent there. How would you handle this if it was your deal? Thanks!

Jeff Payne said:

I think you have a long way to go on this one.  Your appraisal says $219,000 and the buyer will only go to $200,000.  Just playing devils advocate but why would OCWEN take $200,000 if it is worth $219,000.  Tough part is even convincing them it is worth $219,000  if the BPO came in at $285,000.  Did you meet the agent at the property when they did the  BPO?

Choose your escalation battles wisely, especially when the buyer is still off by $19,000 before expenses..... 

Just my thoughts but low ball offers tend to end badly :(

Permalink Reply by Jeff Ogren on December 27, 2010 at 11:02am

Thom- Thanks for the response-I'm trying to get the buyer up to 219K, which is the value my appraisal came in at. I will try to get the comps from the negotiator. Is there a typical percentage of the BPO that a property will sell for?

Thom Colby said:

Jeff -

Help me understand.....  "Had an independent appraisal done which came in at 219K"  but your offer is $200K !  The buyer needs to understand that just because it's a short sale, does not mean the bank will give it away.  Since you're not even close, I would ask the negotiator what comps were used and provide your own comps for OCWEN to consider.  As Jeff Payne said, choose your battles carefully.  Your not even in the same city, let alone the same ballpark, or the same team at this point.

 

Since the Buyer originally offered $160K, they are obviously looking for a "fire sale".  The buyer needs to get realistic about true market value.

 

Best of luck,

Thom Colby

Broker

Newport Beach CA

Permalink Reply by Thom Colby CA Brkr 888-391-5245 on December 27, 2010 at 11:12am

Hi Jeff -

 

There's not really a % of BPO value as a standard the banks will accept.  It just comes down to what the bank is willing to accept as it relates to the true market value.

 

Best,

 

Thom

 

Jeff Ogren said:

Thom- Thanks for the response-I'm trying to get the buyer up to 219K, which is the value my appraisal came in at. I will try to get the comps from the negotiator. Is there a typical percentage of the BPO that a property will sell for?

Thom Colby said:

Jeff -

Help me understand.....  "Had an independent appraisal done which came in at 219K"  but your offer is $200K !  The buyer needs to understand that just because it's a short sale, does not mean the bank will give it away.  Since you're not even close, I would ask the negotiator what comps were used and provide your own comps for OCWEN to consider.  As Jeff Payne said, choose your battles carefully.  Your not even in the same city, let alone the same ballpark, or the same team at this point.

 

Since the Buyer originally offered $160K, they are obviously looking for a "fire sale".  The buyer needs to get realistic about true market value.

 

Best of luck,

Thom Colby

Broker

Newport Beach CA

Permalink Reply by Jeff Ogren on December 27, 2010 at 11:23am

Hi Thom-

This loan was originally part of the Homeq/Barclays sale so they probably got a good deal on it. Don"t know if that makes a difference. If they don't accept highest offer, how long before they would look at a new deal where their BPO might come in lower?

Thanks!

Thom Colby said:

Hi Jeff -

 

There's not really a % of BPO value as a standard the banks will accept.  It just comes down to what the bank is willing to accept as it relates to the true market value.

 

Best,

 

Thom

 

Jeff Ogren said:

Thom- Thanks for the response-I'm trying to get the buyer up to 219K, which is the value my appraisal came in at. I will try to get the comps from the negotiator. Is there a typical percentage of the BPO that a property will sell for?

Thom Colby said:

Jeff -

Help me understand.....  "Had an independent appraisal done which came in at 219K"  but your offer is $200K !  The buyer needs to understand that just because it's a short sale, does not mean the bank will give it away.  Since you're not even close, I would ask the negotiator what comps were used and provide your own comps for OCWEN to consider.  As Jeff Payne said, choose your battles carefully.  Your not even in the same city, let alone the same ballpark, or the same team at this point.

 

Since the Buyer originally offered $160K, they are obviously looking for a "fire sale".  The buyer needs to get realistic about true market value.

 

Best of luck,

Thom Colby

Broker

Newport Beach CA

Permalink Reply by Jeff Payne on December 27, 2010 at 11:43am

I would get the buyer to agree to $219,000 and then present your appraisal to them.  If the buyer won't come up to fair market value, I would find a buyer who will.   Short sale does not mean the lender is going to sell short of fair market value.  I always coach my sellers to accept what we think the lender will accept or something very close to it.

Jeff Ogren said:

Jeff- Thanks for the quick response- Does Ocwen usually hold out for the appraised value or BPO? I would think they would negotiate somewhat. If I could get the buyer up to 219k do you think I would fare better? How do I find out how they arrived at the 285k price? I did not meet the agent there. How would you handle this if it was your deal? Thanks!

Jeff Payne said:

I think you have a long way to go on this one.  Your appraisal says $219,000 and the buyer will only go to $200,000.  Just playing devils advocate but why would OCWEN take $200,000 if it is worth $219,000.  Tough part is even convincing them it is worth $219,000  if the BPO came in at $285,000.  Did you meet the agent at the property when they did the  BPO?

Choose your escalation battles wisely, especially when the buyer is still off by $19,000 before expenses..... 

Just my thoughts but low ball offers tend to end badly :(

Permalink Reply by Jeff Ogren on December 27, 2010 at 11:54am

Jeff-

I will try to get them to 219k. The bank already has my appraisal so hopefully it will work.

Thanks for all your help.

 

Jeff Payne said:

I would get the buyer to agree to $219,000 and then present your appraisal to them.  If the buyer won't come up to fair market value, I would find a buyer who will.   Short sale does not mean the lender is going to sell short of fair market value.  I always coach my sellers to accept what we think the lender will accept or something very close to it.

Jeff Ogren said:

Jeff- Thanks for the quick response- Does Ocwen usually hold out for the appraised value or BPO? I would think they would negotiate somewhat. If I could get the buyer up to 219k do you think I would fare better? How do I find out how they arrived at the 285k price? I did not meet the agent there. How would you handle this if it was your deal? Thanks!

Jeff Payne said:

I think you have a long way to go on this one.  Your appraisal says $219,000 and the buyer will only go to $200,000.  Just playing devils advocate but why would OCWEN take $200,000 if it is worth $219,000.  Tough part is even convincing them it is worth $219,000  if the BPO came in at $285,000.  Did you meet the agent at the property when they did the  BPO?

Choose your escalation battles wisely, especially when the buyer is still off by $19,000 before expenses..... 

Just my thoughts but low ball offers tend to end badly :(

Permalink Reply by Thom Colby CA Brkr 888-391-5245 on December 27, 2010 at 11:57am

Hi Jeff O -

 

Please excuse my "style" - I can be a little abrasive being originally from Boston :-)

 

Here's the deal, no one should care who had the loan "originally" or who has the loan "now", or who might have it in the "future".  There is one and only one very basic issue, it seems the value is higher than this buyer is willing to pay.   It may very well be the property is not worth much more BUT, stop trying to find the "mouse hole" in the wall to get through in order to get an unrealistically low price.

 

Since you mentioned a lot about the Buyer, do you have both sides of this transaction?

 

Step back, and look at it from the seller and the debt collector's (bank) point of view.  They (seller and debt collector) both want as much $$ as possible for the property and that should be the primary focus.

 

If this buyer doesn't work out, another might.  You can submit another offer immediately after this one cancels just like a standard sale.  The debt collector is only approving the amount of LOSS they are willing to accept, nothing more.

 

Best of Luck,

Thom Colby

Broker,

Newport Beach CA

 

Jeff Ogren said:

Hi Thom-

This loan was originally part of the Homeq/Barclays sale so they probably got a good deal on it. Don"t know if that makes a difference. If they don't accept highest offer, how long before they would look at a new deal where their BPO might come in lower?

Thanks!

Thom Colby said:

Hi Jeff -

 

There's not really a % of BPO value as a standard the banks will accept.  It just comes down to what the bank is willing to accept as it relates to the true market value.

 

Best,

 

Thom

 

Jeff Ogren said:

Thom- Thanks for the response-I'm trying to get the buyer up to 219K, which is the value my appraisal came in at. I will try to get the comps from the negotiator. Is there a typical percentage of the BPO that a property will sell for?

Thom Colby said:

Jeff -

Help me understand.....  "Had an independent appraisal done which came in at 219K"  but your offer is $200K !  The buyer needs to understand that just because it's a short sale, does not mean the bank will give it away.  Since you're not even close, I would ask the negotiator what comps were used and provide your own comps for OCWEN to consider.  As Jeff Payne said, choose your battles carefully.  Your not even in the same city, let alone the same ballpark, or the same team at this point.

 

Since the Buyer originally offered $160K, they are obviously looking for a "fire sale".  The buyer needs to get realistic about true market value.

 

Best of luck,

Thom Colby

Broker

Newport Beach CA

Permalink Reply by Jeff Ogren on December 27, 2010 at 1:01pm

Thom-

No worries on the abrasive side. I'd rather hear your unbiased opinion!!

I agree that I can't analyze it too much.

I do have both sides of this.

I'll see what happens and if it doesn't work out, I'll find another buyer.

Thanks again,

Jeff

Thom Colby said:

Hi Jeff O -

 

Please excuse my "style" - I can be a little abrasive being originally from Boston :-)

 

Here's the deal, no one should care who had the loan "originally" or who has the loan "now", or who might have it in the "future".  There is one and only one very basic issue, it seems the value is higher than this buyer is willing to pay.   It may very well be the property is not worth much more BUT, stop trying to find the "mouse hole" in the wall to get through in order to get an unrealistically low price.

 

Since you mentioned a lot about the Buyer, do you have both sides of this transaction?

 

Step back, and look at it from the seller and the debt collector's (bank) point of view.  They (seller and debt collector) both want as much $$ as possible for the property and that should be the primary focus.

 

If this buyer doesn't work out, another might.  You can submit another offer immediately after this one cancels just like a standard sale.  The debt collector is only approving the amount of LOSS they are willing to accept, nothing more.

 

Best of Luck,

Thom Colby

Broker,

Newport Beach CA

 

Jeff Ogren said:

Hi Thom-

This loan was originally part of the Homeq/Barclays sale so they probably got a good deal on it. Don"t know if that makes a difference. If they don't accept highest offer, how long before they would look at a new deal where their BPO might come in lower?

Thanks!

Thom Colby said:

Hi Jeff -

 

There's not really a % of BPO value as a standard the banks will accept.  It just comes down to what the bank is willing to accept as it relates to the true market value.

 

Best,

 

Thom

 

Jeff Ogren said:

Thom- Thanks for the response-I'm trying to get the buyer up to 219K, which is the value my appraisal came in at. I will try to get the comps from the negotiator. Is there a typical percentage of the BPO that a property will sell for?

Thom Colby said:

Jeff -

Help me understand.....  "Had an independent appraisal done which came in at 219K"  but your offer is $200K !  The buyer needs to understand that just because it's a short sale, does not mean the bank will give it away.  Since you're not even close, I would ask the negotiator what comps were used and provide your own comps for OCWEN to consider.  As Jeff Payne said, choose your battles carefully.  Your not even in the same city, let alone the same ballpark, or the same team at this point.

 

Since the Buyer originally offered $160K, they are obviously looking for a "fire sale".  The buyer needs to get realistic about true market value.

 

Best of luck,

Thom Colby

Broker

Newport Beach CA

Permalink Reply by Smitty on January 20, 2011 at 5:03pm

Jeff, I disagree with SOME of the things Thom said.  What I've found "in general" is FHA/VA loans will discount about 10% from BPO/Appraised value and convential loans can discount up to 20% or more depending on the property so for me finding out exactly what type of loan the homeowner had helps me.  Now this is not always the case in every short sale as every lender is different.  I've had appraisals done with Carrington where they wanted MORE than the appraisal amount on an FHA loan. 

 

I don't particularly think $200,000 is off base if the appraisal came in at $219,00 because most appraisers I've worked with usually value a property higher than an agent.

I have a file right now that an appraiser valued a property at $148,000 and I can't get an offer at $130,000. 

 

It would be great to get the most possible, but I certainly  don't think 10% off the appraised value is out of line.  I do think $160,00 may have been but at least it opened the door.  I have had many buyers up offers after they saw they appraisal. 

 

If you have time, let the bank sit and simmer and go back with another offer in 3 months if you have the time to wait.  you can likely request a new valuation at that point.

 

Good luck

Permalink Reply by Jeff Ogren on January 21, 2011 at 12:33pm

Smitty_

Thanks for the feedback.

They just accepted the 200k offer but are only giving me 3 weeks to close.

Is it a problem to request an extension and not jeopardize the deal?

Jeff

Smitty said:

Jeff, I disagree with SOME of the things Thom said.  What I've found "in general" is FHA/VA loans will discount about 10% from BPO/Appraised value and convential loans can discount up to 20% or more depending on the property so for me finding out exactly what type of loan the homeowner had helps me.  Now this is not always the case in every short sale as every lender is different.  I've had appraisals done with Carrington where they wanted MORE than the appraisal amount on an FHA loan. 

 

I don't particularly think $200,000 is off base if the appraisal came in at $219,00 because most appraisers I've worked with usually value a property higher than an agent.

I have a file right now that an appraiser valued a property at $148,000 and I can't get an offer at $130,000. 

 

It would be great to get the most possible, but I certainly  don't think 10% off the appraised value is out of line.  I do think $160,00 may have been but at least it opened the door.  I have had many buyers up offers after they saw they appraisal. 

 

If you have time, let the bank sit and simmer and go back with another offer in 3 months if you have the time to wait.  you can likely request a new valuation at that point.

 

Good luck