In this age of endless foreclosures, falling prices, and economic doom and gloom, many savvy real estate investors are making their fortunes by doing short sales. If you are in real estate investing and do not know how to do short sales, than you are truly missing the boat. If you are doing short sales today, you know that the industry is changing so quickly that it is sometimes hard to keep up.

In order to continually educate ourselves we ask the best and brightest about the latest real estate investing trends. One of my favorite people to call is Dwan Twyford from the Investor’s Edge University, and a regular guest on our show. Dwan told me about a recent article she had published, and I wanted to pass it on to all of you.

Dwan wrote:

One of our superstar students – Jim Fereebe – sent me some interesting information today. A friend of his does BPO’s and sent this…these were the instructions he was given from the bank for the BPO he is getting ready to do..

Special Instructions:

Interior BPO:
Due to the importance of an independent opinion of value, please do not discuss your value with anyone or be influenced by list price, pending offers, accept comp packets, repair estimates or the listing agent’s opinion. Please include a kitchen photo of each unit.

Purpose:
Our mutual client is weighing their options to determine the most appropriate action (restructure loan, accept short sale, foreclose on the property, etc.). To assist them with the decision, they have asked us to determine a market value for the subject, strongly considering condition and current market conditions.

Customer Specific Requirements:
1. For this customer it is okay to conclude above the subject’s list price as it may be a short sale and not represent fair market value or have adequate exposure time to the market. Please let comps that are similar in condition, characteristics and proximity dictate your value.
2. Please specify whenever a comparable is an REO or Short Sale.
3. This customer does not loan on vacant land. If the subject if found to be vacant land please call Clear Capital at XXX-XXX-5011 and provide detailed comments in the form and any additional photos, including address verification, to indicate how the property was determined to be the correct address. Please also provide comments and any additional information on what happened to the structure.
4. Please include all repairs needed (even if not recommended), including cosmetic repairs.

Comparable Requirements:
1. Please use comps from the same neighborhood, block or subdivision whenever possible.
2. Please use the most recent comparables available. If the comparables provided are older than 3 months please provide an explanation in the report.
3. In rapidly changing markets, active listing comps should be strongly considered in your analysis and make market adjustments to sold comparables as necessary.
4. It is acceptable to use REO properties if they are considered comparable in condition, recent, close in proximity, and the market is REO driven.

Standard Instructions:
1. Please use the subject characteristics provided in the BPO Grid (if we preloaded them) to evaluate the property. This information is from a full interior appraisal and is assumed to be most accurate. If your inspection reveals obvious inaccuracies, please explain in the narrative of the BPO.
2. Please do not accept if you or your office has completed a BPO on this property in the last 12 months, are currently listing this property or have any vested interest in this property.

It’s always good to know what the bank is thinking. No matter what the bank is asking for…attend the BPO, give the agent copies of your short sale package, tell the agent the exact price you are looking to purchase the property for, and show the agent the property from YOUR point of view. A good BPO is crucial to a deep short sale.

Thanks and have a great day,
Dwan
Have you purchased your copy of SHORT SALE PRE-FORECLOSURE INVESTING yet?