Replies to This Discussion

Permalink Reply by Jim Schneider on November 30, 2010 at 3:46pm

Laura,
this is an all too common problem. BPO's are loosely regulated, it is up to the banks and the BPO intermediary companies that send them out to complain.

That being said, every bpo company I've used requires me to affirm that I was the one to take all of the photos, that I went through the house myself (if it is an interior), and that noone but me was involved in drawing the value conclusion.

Most of the time these bpo's have to be done right away, submitted within 48-72 hours after the original order was placed. If this just happened today, I would have your agent contact the bpo agent and request a meeting with the bpo agent before the bpo is submitted. They may be willing to do this to avoid the embarassment of having your agent contact the lender. They should give as much verification of the repair costs as is possible, such as a home inspection, well test, and professional written repair estimates if possible. Have your agent take photos of the damage and write up their own estimate of the cost at a minimum.

If the order is already submitted, I would have your agent contact the lender and explain the situation, demand a new bpo, and most importantly, a new bpo agent, as the first one is likely to be pretty POed if you go this route.

If your house was built in 1970 I would not be too worried about comps that were built in the 2000's. BPO comps should be built within 10 years of the subject, within 15-20% of the subject's gross living area, and be within 1 mile (2 miles maximum) if it is a suburban area. Some bpo companies will go back 6 months, most want comps from 3 months ago or less now. You should have your agent check what comps that formula will yield in your area. Then subtract of approximately $1.50 for every $1 of repair.

Please write back and let us know how you fair...and thanks for using the bpo forum on Short Sale Superstars

Permalink Reply by Laura Rencher on November 30, 2010 at 4:20pm

Jim, Thanks for the info. I will give this info to my agent....BTW...I have no idea where the comps will come from if they have to be built within 10 years and so close to the same living area and within the time frame....It will be impossible to find that in our area. It was very rural until about 20 years ago when a large interstate was built to access Atlanta from the north. My house was probably the only one on the street for many years. Now, the 2-3 mile street has only large estate homes with acreage. Ours is one of mid sized ones: 5500 sq ft with 3 acres. There is one with 20,000 sq ft. We had trouble getting an appraisal done when we bought the house due to the comp issue.


Jim Schneider said:

Laura,
this is an all too common problem. BPO's are loosely regulated, it is up to the banks and the BPO intermediary companies that send them out to complain.

That being said, every bpo company I've used requires me to affirm that I was the one to take all of the photos, that I went through the house myself (if it is an interior), and that noone but me was involved in drawing the value conclusion.

Most of the time these bpo's have to be done right away, submitted within 48-72 hours after the original order was placed. If this just happened today, I would have your agent contact the bpo agent and request a meeting with the bpo agent before the bpo is submitted. They may be willing to do this to avoid the embarassment of having your agent contact the lender. They should give as much verification of the repair costs as is possible, such as a home inspection, well test, and professional written repair estimates if possible. Have your agent take photos of the damage and write up their own estimate of the cost at a minimum.

If the order is already submitted, I would have your agent contact the lender and explain the situation, demand a new bpo, and most importantly, a new bpo agent, as the first one is likely to be pretty POed if you go this route.

If your house was built in 1970 I would not be too worried about comps that were built in the 2000's. BPO comps should be built within 10 years of the subject, within 15-20% of the subject's gross living area, and be within 1 mile (2 miles maximum) if it is a suburban area. Some bpo companies will go back 6 months, most want comps from 3 months ago or less now. You should have your agent check what comps that formula will yield in your area. Then subtract of approximately $1.50 for every $1 of repair.

Please write back and let us know how you fair...and thanks for using the bpo forum on Short Sale Superstars

Permalink Reply by Jim Schneider on November 30, 2010 at 5:15pm

Given your situation, there is even more room to play, because when the "standard" parameters don't catch anything, than the bpo agent has a lot more room to play, which means it can really go either way, too high or too low, and this uncertanty can be helpful or harmful.

I would push hard to get your agent in front of the bpo agent, One set of comps as close (geographically) as you can get them that fit into the criteria I've outlined (and hopefully illustrating your point) another set that is within 5 miles (your area is rural by what you described) and is book ended if you cannot find comps within the criteria (if you have one comp that's too big, find another that's too small, if one's too old, find one that's too new) this is called bracketing and is a more advanced bpo technique.

Permalink Reply by Laura Rencher on January 17, 2011 at 3:46pm

Here is what has happened since my first post.   My agent called the BPO agent 3 times trying to make sure he got the comps and the repair list she prepared.  The BPO agent never called back. We found out the BPO amount Jan 3 by my phone call. It was 40K  more than our list price and 90K more than our only offer. I talked to AMS, the third party servicer. They said it that because it was a Freddie Mac loan, she was not aware of any way to complain about the BPO.  We are in the HAFA program and serviced by BOA....who has farmed out their Freddie loans to AMS.  We were approved in HAFA according equator on Dec 12...but have yet to receive a letter, contract, or anything in writing.  So we don't know who to even contact to complain to....My agent was told initially that the negotiator quit, then the file was passed to someone else who said they didn't handle HAFA, now it is supposed to be in the closing dept. I guess when we finally have something in writing, my agent is going to have to escalate up the ladder to get the situation addressed...Any other ideas?

Permalink Reply by Jim Schneider on January 17, 2011 at 6:14pm

Laura,

you really have done everything you can. One item that may actually help is if the negotiator quit, for better or worse the short sale departments have high turn around. Your agent may be able to talk to the negotiator and ask for another bpo, explaining the amount of room for error in this area, and the fact that the bpo agent didn't actually view the home.

 

If the buyer has had an appraisal (they probably didn't but I figured I'd mention, just in case) sometimes that can be extremely helpful. Banks tend to look at appraisals with more weight than the opinion of the listing agent. They consider them more objective.

You may also think about having your agent cancel out the deal with BofA and then send it in again. There will be quite a time delay, but there should be a second bpo. If you go this route, I'd have your agent prepare as good of comps as you can get (share  the guidelines posted here), and have them leave them at your house. That way if they don't give you a lot of notice you can just hand them the comps yourself. Oh yes, also make sure the list price is now relatively close to the contract price. From your last post, it sounds like the asking price was $50k over contract, make that like $5k

Laura Rencher said:

Here is what has happened since my first post.   My agent called the BPO agent 3 times trying to make sure he got the comps and the repair list she prepared.  The BPO agent never called back. We found out the BPO amount Jan 3 by my phone call. It was 40K  more than our list price and 90K more than our only offer. I talked to AMS, the third party servicer. They said it that because it was a Freddie Mac loan, she was not aware of any way to complain about the BPO.  We are in the HAFA program and serviced by BOA....who has farmed out their Freddie loans to AMS.  We were approved in HAFA according equator on Dec 12...but have yet to receive a letter, contract, or anything in writing.  So we don't know who to even contact to complain to....My agent was told initially that the negotiator quit, then the file was passed to someone else who said they didn't handle HAFA, now it is supposed to be in the closing dept. I guess when we finally have something in writing, my agent is going to have to escalate up the ladder to get the situation addressed...Any other ideas?

Permalink Reply by Laura Rencher on January 18, 2011 at 2:12am

Jim,

We haven't submitted the offer because it will kick us out of HAFA if we haven't been approved yet...Since we have nothing in writing that we are approved, we just holding it.  The interested buyer knows about this and is patiently waiting.  So we have no open offer on Equator.  Also, I think we no longer have a  negotiator because our file is now in closing dept (awaiting an offer, I guess). ARGH!!!!

This whole thing is just so frustrating. Our package for HAFA was completed on Sept. 10!!!!?@*???  If we are truly in HAFA, it looks like Freddie Mac will be owning our  house in  6 months through DIL because of a bad BPO agent, BOA's inadequacy, and Freddie mac's lack of escalation/complaint process regarding BPO's. We have constant traffic in our house...My agent and I believe we could sell it....if they would just let us. 

Real Estate purgatory! That is how I view short sales now...