Short Sale Tip # 6: Controlling The BPO

Today’s Tip is about the BPO…or where the show begins!

This is the most important “process” of a short sale. It is an aspect of the short sale process that you MUST control…and attempt to influence. Short sales can be won or lost based upon the outcome of the BPO. If you fail to justify to the evaluator why the number you need is correct, then your chances of getting your short sale accepted at the price that you want, are pretty low

The BPO ( Broker’s Price Opinion), is the lender’s field review of the property to determine what they will assert as the value of the property in question.

The lender may often use the services of a local real estate agent to perform this valuation and will use it in conjunction with an AVM to impute it’s value of the property. As you can imagine, there is quite a bit of room for err in arriving at this number.

When the bank orders the BPO you need to be involved in every step. You need to be the contact that the evaluator contacts to gain entry to the property.

It is a very good idea for you to arrange for the homeowner not to be home so you can lead the evaluator through the house pointing out every problem point that you already know of.

Don’t assume anything. Sometimes they arrive and do not even know the property is in foreclosure.

Be armed with the following:

1. The comps that you researched and believe to be indicative of the “current” value of the property

2. A completed repair and improvement estimate from a licensed contractor

3. Copies of any code violations , if any

4. Bring copies of the documents you intend to include in your short sale package.

5. Submit ANYTHING you have that helps justify your number and that which makes the evaluator’s job easier.

Remember, they are only making $30-$90 bucks or so to perform this BPO and although we want this person to scream “uncle”…we want to provide him with documentation he can use to justify our number. This is important because we also let the evaluator know we are sending all of this information to the lender and the last thing an agent or broker wants is to seem incompetent in the eyes of what they are hoping is going to be a listing client.

Be assertive, helpful and courteous without being argumentative. You need this guy to be comfortable with you as you never know when you may run across him again.

Sometimes, if you strike up a good rapport, they will tell you whether or not they can hit your number. Be smooth, be upfront and be yourself.

Smile, be helpful, hold the dog, turn on the lights, bring an extra bottle of water…remember, this guy’s attitude can mean the difference in your deal.