When you do a short sale, the lender will most likely request a BPO.
BPO is the acronym for Brokers Price Opinion and is a process by which a real estate agent
appointed by the lender, he goes out to evaluate the property and gives his “opinion”
about what the property’s value is. The lender then sends a real estate agent to the
ownership and it is your job to influence the BPO to get as low as possible.
This is the key to a successful short sale. That is why he wants the lender
contact you, so you can meet the realtor at the front door and influence their
BPO to be as low as possible. To build your case, the first thing you
what you need to do is come up with a list of repairs and estimates for the property. If you
you have to go find a contractor to offer a job or repair it, go find one. The higher the quote,
the best. This is good evidence. The second thing you should do is introduce yourself with
a list of comps in the area that are low. Most real estate agents appreciate you
doing some of your work for them. Give them the lowest compensation you can
find and they will decide if they want to use them or not.
When you meet the realtor on the steps of the property, tell him that you are the buyer and
doing a short sale of the house. Then proceed to walk with the real estate
through the property. When walking around the property, be sure to
Point out any and all repairs or problems on the property. One more time you’re trying
Make your home value as low as possible. If it is a
nice house with small cosmetics, you may have to look for trouble.
Then give him a call the next morning to see if he could get the price he wanted. Sometimes they will tell you that sometimes they won’t. Just ask to find out. If they won’t tell you, call the bank. Many times they will tell you. You really have no control over this process. You can encourage the BPO to go down, but this doesn’t always mean that they will.
If there is someone living on the property, you can ask them to leave when
the real estate agent goes out to do a BPO. If they can’t tell them to stay out
off the road. Explain that you will try to make the home value seem so low
it’s possible. They may not understand why, just tell them it’s the only way to save
his house. Also, tell them not to worry about cleaning at all, just leave it at that.
it is. This is the only time your home can be a mess. You need to make the value of
The property looks as low as possible.
If the property loan is FHA or VA, they will take no less than 82% of the BPO.
Generally, you can expect the BPO to be in the range of 80-90% of the
repaired value. So if you have a home that is worth $ 120,000 after repairs, the BPO
you could guess between $ 98,000 and $ 108,000. Then multiply that amount by
82% and this should give you a good estimate of what to offer. If you are not a VA / FHA
loan, then you can offer whatever you want. It is a good idea to start small, only in
In case your BPO is lower than you thought, you can always increase the offer. That
It is an educated guess to find out what the BPO will be. If he comes back
high not in your favor, sometimes you can call the loss mitigation department and
tell them the BPO is too high. Many times they will work with you and
Order another BPO. Whatever you do, never give up. If they don’t accept it
negotiate with them some more. Ask them what they are looking for or what
are trying to get. Sometimes they will tell you, sometimes they won’t. Be
persistence. Be patient. Ask, ask, ask. Part of the success in this business is
how it is negotiated. You never want to be rude to them, but let them know
where are you. Let them know what is happening to the property.