The games we short sale agents must play! Here is a perfect illustration about why short sale lenders should not rely on one value, called a Broker Price Opinion (BPO), to decide if an offer is the right price.
1. I list a Fort Walton Beach Florida short sale at what I believe is close to market value- $89,900. I've been doing this for awhile, so my philosophy is to price where other comparable properties will support this value, using recent sales, competition, pendings and expireds.
2. I receive an offer in the $80,000s. The seller and I discuss that this is likely in range of what the BPO agent will come up. Seller accepts offer and I forward short sale package to Bank of America.
3. Bank of America orders their BPO. I receive a counter offer, stating BPO value is $124,000. Gee, I must have really missed pricing right here! How could I have been so stupid? Off by 30%! Buyer walks.
4. I raise the price to $124,000. Aahhhhh, only for a short time. I know the BPO is only good in this case for 90 days (not a VA compromise sale). Of course, no one looks at the house. I slowly lower the price.
5. 90 days are up! I reduce the price back down to what it originally was, actually a bit less, since our market has now dropped.
6. PRESTO! New offer in the $80,000s.
7. I send the short sale package to Bank of America. I pray they don't get a dumb BPO value again.
8. We are in luck, the mighty BPO agrees with the contract price this time! I am blessed! Short Sale approved in the $80,000s.
Meanwhile, Bank of America spent more on legal fees. I spent more on marketing. And the seller hurtled four months closer to foreclosure. Let the short sale games continue.
It's Wendy!
Wendy Rulnick, Broker, Rulnick Realty, Inc.
Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204
Email Wendy: itswendy@rulnickrealty.com
Fort Walton Beach Florida Real Estate
Fort Walton Beach Short Sales & Pre Foreclosure Help.
Read Wendy's Fort Walton Beach Real Estate Blog
Wendy is a short sale and pre-foreclosure specialist and has been featured in "Kiplinger Personal Finance Magazine" and "Florida Realtor Magazine". Call Wendy Rulnick, Broker/Owner,to list and sell your home or condo on the Emerald Coast of Florida in Walton, Okaloosa and Santa Rosa County- Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field.
**********************************
like buttons
Comments
I found that it helps to use a combo box once the sale is in escrow so that the BPO agent has to call me for the combo. That way we can have a short discussion prior to them going to the property - or better yet, I meet them at the property so I can answer any questions they might have. If the agent never goes to the property and does it by MLS comps, it gives you a good argument with the lender that the BPO agent did not do their job.
I just had the exact same scenario and 4 months later we are getting ready to close at $15,000 less than the deal we gave them in March. The bank made a foolish decision by relying on a value from an inexperienced BPO agent instead of a broker with many years of sales in the subject neighborhood. It's the nature of the business and I'm sure Wendy who has done many short sales did all that could be done at the time.
But of course if you have an inside track that will help us all in the future please tell us about it. That's what this site is all about. Thanks for participating.