Posted by Steve Loynd on November 18, 2009 at 2:30am
Another Short sale story...where a BPO done from a-far was the kiss of deathWorking on a short sale in a project where the last sale was over a year ago, I advised the seller of the likely selling price and asked for the price adjustment...subject to his lenders acceptance on a short sale offer.90 days from listing date (showing this was still not a give away price) a 90% offer is made, with the only condition being the seller lender accepting the short sale. Two months in to the process two superior locations, of twice the size sell for twice as much as the current short sale offer.Along comes a distant BPO (done of $50- sight unseen), and the value is set at double the offer. My Offer is declined end of discussion. I tell the seller, "sorry this is your banks decision - game over". This loan had a 3 yr. balloon note clause whose date has already passed, there is no place to go, the lender tells me we are better off foreclosing on the property...Based on the BPO which they will not accept from me-is flawed.Everyone loses, except maybe the next agent to receive the listing post foreclosure...they will offer a new opinion of value upon listing and once its bank owned it will be negotiated...without the flawed data that killed the short sale option.Whats the harm you ask?, The seller has a foreclosure on his record, the bank has the added expense of the foreclosure (as they wouldn't take the property as a deed in lieu of) and the buyer will move on to another property...The bank, the seller, the buyer and the listing broker (me) all lose out on the opportunity to get this deal off the books and retire another bad loan. Why?...a $50 BPO done by an out of town agent, who the lender wouldn't tell me who it was...and even if I knew wouldn't change the opinion now anyway.The sales I used to set the asking price 5 months ago...were not even noted in the "new Broker opinion of value" they gave me the comps over the phone (but wouldn't send me the report) but wouldn't look at the 5 other listing still for sale at the subject project with asking prices in the same neighborhood (as the subject) .We are in trouble here when the lenders make counter offers for more than they are owed for their payoff, then outright decline market value offers based on flawed BPO's....Hire a licensed appraiser if you don't believe me? Did it ever occur to you the person doing the BPO thinks they'll get the listing and ask for a price drop later?Thanks Wells Fargo you are doing a great job, make sure you reflect this in your next request for government bailout money
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