A lender I am working on a short sale did a drive by bpo on a property I want. This home looks very nice on the inside as well as on the outside. I requested they conduct an interior inspection but they simply did the brive by. I wanted the interior so at least I might be able to convince the inspector that although my offer was low it could be justified.
I am a little afraid that the bpo might come back higher if they come inside but I’d take that chance. I know there are no hard and fast rules but do any of you get the price you want just from a drive by bpo?
I am unsure if the drive-by was done by a broker (BPO) or an appraiser. Usually a broker will not do an inspection but will give an opinion based on a study of past sales, pending sales, and active listings in the immediate area. It sounds like an appraiser was involved.
There is an appraisal form (2055E - Exterior Only “Drive-By” Inspection) used by appraiser for a single family drive by appraisal. This is a summary appraisal report. This appraisal may be ordered to:
Ballpark estimates on properties and the surrounding area.
To narrow down search of any group of properties considered.
For PMI (Private Mortgage Insurance) removal.
For home improvement cost vs. value compared to area market
For buying a home.
The appraiser is required to, at a minimum
(1) perform an exterior inspection of the subject property from the street
(2) inspect the neighborhood
(3) inspect each of the comparable sales from at least the street
(4) collect, confirm and analyze data from reliable public and/or private sources and
(5) report his or her analysis, opinions, and conclusions in this appraisal report
The appraiser must be able to obtain adequate information about the physical characteristics of the subject property from the exterior inspection and reliable public and/or private sources to perform the appraisal. The appraiser should use the same type of data sources that he or she uses for comparable sales such as, but not limited to, multiple listing services, tax and assessment records, and observations from prior inspections, appraisal files, and information provided by the property owner.
Even if the appraiser (or broker) did inspect the interior there would be little that they would report unless there was a significant structural failure evident – i.e. roof falling in, foundation cracking, etc. An appraiser is required to measure the outside and inside of a property (to prove that the property is actually there) but will not comment on the property as to its style, decoration, age of appliances, lack of modern touches (granite counter tops, tiled bathrooms, etc) and cleanliness. The most comments an appraiser will generally make is whether the property is up to the standard of the neighborhood.
If the property is occupied you may want to have the owner (or you if needed) get an appraisal done. This shouldn’t cost much more than $350- $450. You could back up the appraisal estimate with your own study of values in the area. Research past sales for the immediate area; within one-half mile and within the past six months. In addition, you may want to develop a list of inadequacies in the property along with cost estimates to remedy these problems.
Great info Teksch. It seemed like the Wells Fargo appraiser for one of my SS followed this procedure to a tee. I had a prospective buyer try to get financing through Countrywide, which sent an appraiser to the property. Countrywide appraised it for $5K less than Wells Fargo.