I normally do not put a dollar amount on the purchase contract instead opting for “payoff” telling the LM that I will provide my offer separately after I get the bpo or contractor’s estimate.
BUT, Sometimes the LM will tell me that I need to have a dollar amount on the contract before they can order a bpo. What percent of times does the LM tell you this?
MY QUESTION - Should I just take the (LOW COMPS - REPAIRS - liens - holding costs) * 75% as the intital offer. If it is too low - say less than 50% of the payoff, they probably won’t even order the bpo.
What do you offer to avoid getting “shown the door” early when the lender doesn’t know the condition of the property, lein, etc…?
I too wonder what to put in the dollar amount column. Like you I have been putting “subject to loan payoff” or “subject to agreed loan payoff”
Since I have only been working on a few SS I can not say how many ask for a specific dollar amount.
One of the lenders I am working with right now is Equifirst. Amount Owed is 125k I offered 60k. They ordered an appraisal within three weeks of first contact.
I guess it all depends on the lender. I have heard that some lenders will try to get you, the investor, to pay for the appraisal.
The formula most seem to use for figuiring offer price is After Repair Value(ARV) *.7 - repairs,hold, etc. So if you are looking for a number to put on a contract that one should cover you a$$. If your comps are in line they will not balk at ordering a BPO… If they do not have one already.
I usually don’t hesitate to put in a low-ball offer. And so far, no problems with banks ordering BPO. Although, when I say “low-ball offer”, there is some thought involved.
I always put a dollar amount on the purchase agreement when submitting to LM. Depending on the value of the house (mostly under 200k), my initial offers will be about 40% of ARV. Then in my cover letter to LM I will strongly suggest a BPO or appraisal be ordered and that I can be available this Wednesday or Thursday to provide access to the property.
Then after faxing over the offer I will call the LM to verify receipt of the package and acknowledge that the offer is low and that an interior inspection must be ordered so the offer can be taken seriously.
Obviously, nothing is more important than getting the BPO or apprasial agent out to the property so I can meet them face-to-face and make my short sale case. In my opinion, this is the most critical point in any short sale.
I agree with SSMike… Influencing the BPO is one of, if not the most, critical events of a successful short sale. There aren’t too many houses where I cannot find anything negative to point out. I may also show up with my comps, and perhaps a contractor’s estimate for the agent/appraiser to consider. Remember that if it is an agent, they are getting paid a measily $50 - $75 so the easier you can make it for them (by providing comps and such), the better it is for you.