Short Not Accepted
BPO came in at 125k. I countered my original offer of 60 to 72k. They rejected. They countered at 120k. They seem very unflexible, they basically told me to counter higher. What should I do now. I could sell as is close to 150k. With a BPO of 125k where should I stop and hold my ground. Goes to Auction on the 12th.
What kind of loan is it?
BAMZ
Also, any repairs? Need more info before anyone can help.
Tom
Quote: What kind of loan is it?
What do you mean and why would it matter?
Brenda
Let's try this approach.
What criteria did you use to establish your 72K offer?
Does this reflect your anticipated rehab costs?
If not, what do you estimate these to be?
Etc. etc.
Banks are much more experienced nowadays and have some (unpublished) guidelines governing their decisions on short sales.
The BPO supposedly reflects an expert opinion on the value as-is of the property.
It is very hard to give advice based on "I offered X and they countered Y, and what now?"
The numbers and the particulars that only you can supply may hold the answer, so the question of BAMZ is a fair one.
Humour him, and he will give you his expert opinion and hopefully it will help you to make a profit yet on this deal.
Happy investing.
[addsig]
"What do you mean and why would it matter? " ..............................
The bottom line is that you work off their BPO number, not yours. If you can be there while the BPO is being performed, this will help you emensely if you can show the Agent why you feel that the property is worth less.
The kind of loan matters because in knowing this, you will know your rough limitations. If this is a conventional loan with no PMi, you will know that there may be some flex room. If this is an FHA loan, you can hope to get them to discount the BPO amount down to 82% of that value. If this is a VA loan, you can hope to get a discount of the BPO to only 92%. %10 of $125,000 is a significant difference. There can also be other people invovled in the decision making of this discount, like who the investor is and is there PMI on it?
Without this information, neither I or anyone else on this board can provide you with a sound opinon.
BAMZ
Unless you can attack the BPO itself (the agent who prepared it is inexperienced, or the property has significant repairs that the realtor overlooked, etc) you are hard pressed in my opinion to have them come down $50K. Lenders view the BPO as an objective estimate of value while viewing your estimate of value, especially in light of the huge discrepancy, as somewhat suspect at this point. Unless you can objectively attack the BPO I would think you chances of getting your price are slim to none. Think...was there something the agent overlooked or where the "comps" used by the broker for properties in nicer neighborhoods, etc. Hope this helps.
Quote: If this is a conventional loan with no PMi, you will know that there may be some flex room.
What is the difference in a short sell with a conventional loan that has PMI and a conventional loan that does not have PMI. How does PMI change the lender and the negotiator?
Thanks
Brenda
bmaz:
When you say "82% of that value", do you mean of the total principle interest and fees outstanding?
Quote:
On 2004-01-30 11:45, mnhead wrote:
bmaz:
When you say "82% of that value", do you mean of the total principle interest and fees outstanding?
mnhead,
82% of Broker's Price Opinion (BPO).. Actually, they will want to net 82% of BPO for FHA..
I tried to get some lenders to knock off some late fees, but its a no go if your BPO number is not in your favor..
Bginvestor
I have been talking with the manager of the short sale department. The BPO was ordered by MGIC so there was MI on the property. It looks as though there was 20% coverage. They called the owners who are foreclosure and told them they would take 115k from me. I am at 82.5k right now. The bank I believe will break even at 115k. Principle balance of the loan was 139k. What do you think they will accept. They are basically telling me to get lost until I up my offer closer to 115k. Under 100k I can make it a cash transaction, should I tell them anything over 100k I cannot make a cash offer. Any thoughts in helping me with this negotiation would be greatly appreciated.
Hi beallrobert,
If there is MI on the property, you have more fingers in the pie. I once had a similar property as you (number wise)that was owned by Freddie MAC that also had MI. The BPO came in stronger than I would have liked, and they were totally firm at only discounting the BPO to 92% of the BPO. This of course was not what I was hoping for.
I stayed firm on my lower offer and they told me to get lost. About 2 weeks later I called up the L/M contact and told them that I was still interested, and if they could live with lowering there (FIRM Botton Line) down only $11,000 more that I could close in 48 hours. The rep called me back in less than an hour and all parties to the loan agreed to it.
It may benefit you to put this one on the shelf for a few weeks, see if you can locate any further information on this property that help your proposal, and try one more offer with them. Keep in mind that you will need to bring your amount up considerably, so you may want to think about a different exit plan that would still be profitable for you!
Best of Success!
BAMZ
Talked with the closer yesterday. They accepted my offer. Closing in two weeks. I went back an forth with the loss mitigation department and what I have read on this sight about the first person in the chain of contact of the loss mit. dept. is exactly correct. They basically have a set formula and until you come close to fitting into that formula, the offer sits and doesn't get passed up the chain of command.
Thanks for all of the responses. Is there anything I need to be concern with between now and the closing, I have: clean title, commitment from the bank and the seller. What should I have in my hands besides a cashiers check.
What exactly do I need from the bank other than the finalized SS approval and what should that consist of.
Hi beallrobert,
Be certain that you have the short sale approval in wirting from the bank. As long as you have the title commitment and the deed, send the bank the check now and record it!
However, be certain that your homeowner is out before you give the bank the check. This may save you some eviction hassels!
The only other thing that I can think of that you need is a buyer!
Best of Success!
BAMZ
just curious what did the bank accept