What's up with these BPO's
I've had 2 BPO's done in the last couple weeks. Each time I accompanied the representative and although I provided them professional bids on the repairs, each appraised the property at much more than is reasonable. In fact, one came in at $95-$115K with a current 2 y/o mortgage of $75K. The roof is bad, dog/cat urine stains over the whole house (wood floors) and it needs painting on the inside.
On this house, the lender says she will only take the current payoff and not short sale----even though the "cosmetic" work needs to be done ($15-18K). I jokingly made the remark that I thought we were doing a short sale and not a long sale.
Is this common especially when lenders know their are investors like all of us looking for a great short sale opportunity??????? 
I am with you. I had a Bpo done on a multi family dwelling and they have to go again to "make sure" there are no tenants in. They messed up the whole short sale and from what I heard they hire average realtors to do these. WHo knows they might be sticking it to us because we are investors..
I am with you. I had a Bpo done on a multi family dwelling and they have to go again to "make sure" there are no tenants in. They messed up the whole short sale and from what I heard they hire average realtors to do these. WHo knows they might be sticking it to us because we are investors..
007--
Yes this last BPO was a realtor and he gave FMV all fixed up but the lender will not see it that way. She thinks it is FMV as is. I actually spoke to the realtor after I got this info from the lender.
BTW--he wanted my business when we were doing the walkthrough. I called him yesterday and tactfully said I thought he overpriced the property and potentially screwed up the deal. I actually think he wants the property for himself. If this is the case he has me by the %*##@. However, I will probably just pay the note off and sell it owner financing.
BPO's are like appraisals, they'll price the property up or down depending on who is footing the bill. BPO's are actually worse because frequently, the agent doing it is inexperienced and most agents only do a drive-by inspection.
Roger
Roger is correct. The BPO request from the lender is generally faxed in the real estate office. In most cases, any realtor (new or experienced) can pick up the request because it will allow them to make a quick $50-$60 bucks. The BPO's can be really bad when an unexperienced agent tries to make a judgement call on a FMV.
Best of Success!
BAMZ
I hate to sound really uninformed, but I'm new to this. I've been a landlord for a few years, but am new to investing...
What is a BPO?
I really don't see what the big deal here. If this bank own property does not work for your investing needs, then you forget about it and go on to the next deal. It is as simple as that, there are limitless deals out there to be had, don't waste time and effort on one that will not allow you to get the returns you desire.
tomjerry200,
When you get immediate resistance from a bank on a short sale, that is perfectly normal. Continue talking with them by perhaps adjusting your offer or by selling them again as to why it is to their benefit to short sell to you right now. You will know when the right time is to walk away. But it is always a good idea to work many deals at the same time (even when a bank is giving you grief . . . that is all part of the game.
When you come across a BPO (Brokers Price Opinion) that is above the as-is market value, then there is not much that you can do, the bank is going to make that price their stronghold. But it still wouldn't hurt to send a couple of faxes to sell them on your position again. The worst that could happen is that they could tell you no again.
I was working on a property back in january that I decided to walk away from because of the resistance from the bank. Out of curiosity, I sent them a proposal last month and they agreed to short sale their mortgage by tens of thousands of dollars.
There are many good investors on this forum that suggest quickly that you give up and go to the next. You will know when not to spend a lot of time on each deal and when to take it off your list. But as the example states . . . if their is still a viable angle to work, it may be worth working it by tens of thousands of dollars.
Best of Success!
BAMZ
BAMZ--
Thanks for your input. I think you are right on track. Unfortunately, I work a full time job so having sufficient time to work numerous deals simultaneously is challenging. With that being said, I guess my expectation to make money on the majority of deals is a little over confident. My goal is to be 100% in real estate by this time next year.
Thanks again
Thanks, BAMZ
The realtor who has time to do a BPO for $50 is just not the brightest kid on the team so don't expect it. Be nice to him but work on the Loss Mit Rep with remarks like...$100,000 GAWD! That's what you get when you pay $50 for a BPO. Low pay breeds poor results. You get the idea.
I should go a step further with that . . . the Realtor who does the BPO for $50 or whatever the fee, also has the intent completing the BPO for a priority opportunity at the listing, should the bank take the property back.
And from being in real estate, I have found that many realtors may suggest a higher value for your property when they are trying to get a listing agreement from you. The same pattern can be applied to the BPO, especially from a non-seasoned agent.
But the fact is still true like FrankCA said,
low pay breeds poor results.
Best of Success!
BAMZ
rottzilla - BPO = Broker Price Opinion.
Clarification....Hello, this is my first post here at TCI. Allow me to clarify a few "possible" misconceptions about the BPO. I am an REO Broker in Georgia who does plenty of $50 BPO's and it's not because I'm no good or not busy. It's because that is a huge chunk of my business. Most of the Brokers who sell REO on a regular basis bring in numbers that are totally realistic on their BPO's.
The rub lies in the fact that the bank actually usually gets two BPO's. One from me "the REO pro" and one from anyone else who will take it. (perhaps the guy who is not experienced or not too busy to fool with it). THEN the bank sends an appraiser out to supplement the two BPO's. This is usually where the price gets jacked up. While it's true "in theory" that the house might be worth a certain amount, I know that an investor is the most likely AS IS buyer and I know what most investors are willing to pay, Because I am an investor myself. (I buy 1-3 houses per month).
Another problem is that the asset managers at the bank are paid based on the return they procure on the dead asset. Some have the philosophy of cutting the loss and others would let it get awful cold somewhere before they reduce the property at all. (BTW - time usually heals this problem).
Just wanted to throw my 2 cents in. I want well priced REO property that will move and not have my sign out for months at a time and have me paying to keep up the lawn and utilities.
Regards,
Chris
PS - While I have a good working knowledge of how the asset mgrs. decide on whether to allow a short sale based on their BPO numbers, etc....I don't actually have any experience with doing short sales. Have you guys found that you can short VA loans or FHA loans versus conventional, etc. I buy my properties either at the courthouse sale or when they become listed REO's. Any comments appreciated.
Hi Chris,
There is certainly more flexibility in Conventional loans.
FHA loans are guaranteed up to 82% LTV.
Va loans are guaranteed up to 94% LTV.
If you will be working with FHA or VA on a short sale, it would be in your best interest to show the appraiser or broker why the BPO should not be the same value as other comps because of ____ ____ and ____.
Best of Success!
BAMZ