BPO Valuations

BPO Valuations have been harder to dispute. Due to the loss the lender will take on a short sale and the inability to pursue for a deficiency judgment they are becoming a bit more unrealistic on the values. It doesn't help that the BPO agent they send typically performs an exterior BPO. If the property is in a nice neighborhood but has alot of repairs such as water or termite damage, plumping issues or cracked tile; there is no way you will have a fighting chance if the BPO agent has not performed an Interior BPO. The BPO agent and the short sale lender will base their value on the last 3 sold properties in the neighborhood.

Values are still declining and will continue to for quite some time. One of the issues I see with the lenders basing the value off the last three sold comps is those listings were most likely sold 6-8 months ago. With the market decline there is no way that the BPO agents number is realistic. The fun part is trying to plead your case. It has been my experience that a short sale is an art of its own. It has to be set up correctly from the beginning. We have to be able to see a problem before it occurs in order to be able to overcome those potential challenges successfully.

We have to know the home inside and out. Any repairs need to be listed and if there is anything visible, pictures are always helpful. If there is severe damage it may be in your best interest to get a home inspection completed so you know exactly what you are getting yourself in to. This will also help you to be able to set expectations with your buyers. If a buyer finds out about damages after you get short sale approval you run the risk of the buyer either reducing their offer or they may back out all together and put you at risk of going to foreclosure.

A strong listing history is always helpful. We recently had a value dispute with one of our properties. We were getting killed because the property is in Solana Beach and prices in the neighborhood were higher than our offer. I had a strong listing history starting at the number the bank thought it was worth and did periodic price reductions. I was able to show them regardless of what their comps were, our listing history that shows where we started and where the offer came in was proof enough that the home is worth what a buyer is willing to pay. The second thing I had going for me was a list of detrimental factors such as; the home is located on a busy street across from a shopping center. The bank wanted $95,000 more than what our offer came in at however; after presenting all the above and detailed descriptions about the last three sold comps and how they differ from our listing we were able to get our value accepted.

We are going to continue to run into this issue and more value disputes will most likely have to be performed however; I believe if we take the appropriate steps in the beginning we will be able to achieve the ultimate goal which is a short sale approval. Good luck to you.


(Quote) Quality questions create a quality life. Successful people ask better questions, and as a result, they get better answers." Tony Robbins"


REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?

Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.
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