I am ready to make an offer. I know this bank (CW) wont accept more than 82%, at least that’s what they told me.
Need help arriving at the 82% figure. is the 82% rule based on the net to bank, meaning after paying r/e commission 6%, taxes behind, and even behind payments? or is it just the typical
acct balance+ holding costs * 82%?
which one is it, pls advise
Hey Nick,
It is usually 82% of the BPO. SO it is your job to influence the BPO.
so do that mean if the BPO price is 100k the bank will take no less then 18%
BPO price 100k - 18%
1st balance: 230k
pmts in arrears:6k
2nd balance: 50k
pmts in arrears:2k
bpo: 300k
tax payments in arrears:6k
6% real estate commissions
you are suggesting the 82% minimum they are looking for is 300k* 82% = 246,000
6% comm: 18,000
taxes: 6k
net to bank: 228000, if i offer 246,000
are these figures correct?
82% is net.
If most lenders ask for 82% net of bpo, this kind of throws most deals out the door. Meaning, as an investor, you want to enjoy at least a 30% equity cushion. So, this tells me that banks that do require this 82% net deal( ie: CW, in my case) ; it’s just not worth it to pursue it.
That means you get only 18% equity, minus repairs, real estate commissions, holding fees, etc. You are breaking even. Not worth it!
Am I interpreting this the wrong way??? Pls clarify.
BPO is the as-is value. That is for you to determine. Not the agent not the bank but you.
Say a property is worth 100k.
Needs 5k in repairs.
You say the property is worth 65k as-is. Then it is your job to have the BPO come in at that price.
So the BPO is the as -is value, so if a property is worth 100k need 10k repairs. and the BPO comes in and say the property is worth 60k, so will the bank accpet 82% of that example
FMV 100k
Repairs 10k
BPO 60k -18%
Lender will accept 49,200
Did I do that right, pls explain
It depends on how much is owed to the bank. If the homeowner owes 100k, it is very unlikely.
Banks are not stupid, you have to present it in a way that will make sense.
Show them that it is a benefit to deal with you.
I can see how you can influence a bpo if you’re dealing with SFRs. what if we’re dealing with condos? let’s say last condo sold for $100k, I can not possibly say the as is condition is $65k if subject unit is not really in bad condition. condos are easy to price in that all you have to do to get an idea of value, you go to last sale w/in complex. If most recent unit, same as subject unit, sold for $100k, I’m pretty sure bpo will come in at $100k, given that subject is in good condition? I guess what I can do is on the net sheet or hud1, I can include every fee possible to try to arrive at least to a 70% ltv figure from the bpo, if bpo = same price as last condo unit sold ($100k in example above)
Well you can’t get every deal under the terms that will work for you. 
Good Luck
The last one i attempted with those suckers went south.
Sales in the location are good, so they did not budge.
offered 91% of the BPO and did not take it.
They were the only loan.
I am staying away from Wells fargo and CW both on
Reos and pre-foreclosures. Just not worth the time.
-Krish
I disagree, it depends on the rep that is handling the case. I recently had countrywide accept a discount of 35.4% and wells fargo is considering an offer that is 58.9% of fmv. Wells fargo has postponed the sale.
But in another token, countrywide would not consider a discount at all for a property that needs 50% in repairs and they want 100% payoff.
The discount is between the rep and the investor.