I am a licensed Realtor in Houston Texas. I have closed several successful Short Sales but recently ran into a problem on two recent ones.
BPO ordered, ARV was 215k. Approx 50-60k in repairs. Mold is big issue! I submitted condition report and itemized list of repairs along with 30 pictures documenting problems. Current offer is for 160k. BPO came in to lender and LM stated the BPO value was 215k and they would have to net 193k. I spoke to Realtor who completed BPO. He stated pretty much in the report what I have previously stated to the lender. I feel the LM/Foreclosure department is misinterpretating the BPO. They sent it to foreclosure. I am trying to make a last ditch effort to communicate with the foreclosure attorney and possibly short sale this property. Any suggestions from some seasoned short sales experts? The lender is Freemont Investments and loans
BPO was ordered , Lender referred to it as IMA. Report came in and was a drive by conducted by a lazy individual looking to collect a fee from their desktop. Grossly overvalued! BPO based on a county appraisal district estimate which is incorrect. Do not know who did it. The only way to access property was to contact me. I submitted comps to the lender however thay are sticking with their BPO. They claim to have no information on who did the report because it is out sourced. Any suggestions? Lender is OCWEN
This is why it is very important to be there during the BPO. If you have already submitted pictures of the repairs and comps there might not be much you can do. Maybe ask for second BPO.
As a realtor what are you doing with these properties?
BPO’s can be a blessing or a royal pain in the ass. Whether it’s a BPO or an Appraiser you should always be there.
I run into this problem quite a bit. Each time I do the same thing. Sometimes it works and sometimes it doesn’t. It just depends on whether the LMR will listen to reason. More often than not I end up having to speak with a supervisor about this.
A lot of these lenders believe a BPO is just as good as an actual appraisal. Often I find that the individual conducting the BPO isn’t even a broker, their just a Realtor. This has contributed to the current mortgage crisis because of miss valued properties.
Prior to the bank sending a BPO I drill them about why they use a BPO vs an appraiser. The entire time I’m saying things that insinuate or flat out state that BPO’s are unreliable. The 150+ lenders who have closed this year used BPO’s vs licensed appraisers. Any fact that relates them using BPO’s vs appraisals to the banks that have closed will generally get them to use multiple BPO’s or a real appraiser.
In your situation, if the BPO really is bogus, tell them bank just that. Tell the bank to get a second opinion from a seasoned broker in that market who doesn’t do BPO’s as their main source of income. Tell them that the current BPO is so far from the real value of the property and the guy/gal that conducted it should have their license pulled for being so stupid.
Yes it’s harsh, but it gets a supervisors attention. Besides, most of the time its not that far from the truth.
As for the drive by crap… ask the rep if they have ever heard the saying, “don’t judge a book by its cover”? The binding may look like a really good story, but the pages could all be blank. Common sense tells anyone with half a brain that driving by a property in no way allows for a proper value assessment.
Tell me about it… I have a BPO for hte SECOND lender that came in too high and is on the verge of killing my deal. (for a house I already have a RETAIL buyer for!!!) The 1t BPO came back right where I needed, BOTH times, the 2nd’s came in almost 30K higher. The LMR has reccomended it be accepted, but the investor declined. The LMR got them to reconsider, but so far, I haven’t heard good news back. I did however, get the LMR to commit to a 2nd BPO if the investor again declines. :S I will be happy if they do a 2nd BPO and it gets accepted, but I feel very badly for wasting so much time for the HO’s sake and my buyers. The 1st is playing ball and while I don’t have the payoff letter, I do have a verbal agreement, so I’m satisfied they will come through. :S REALLY need the 2nd lender to wake up. That investor needs to realize he won’t get squat if he doesn’t accept. The lady hasn’t made a payment since DECEMBER and she STILL hasn’t gone to sale yet!!!
Ocwen is mearly a servicer so they take their direction from the ‘investor’ which could be some firm in China for all we know. Ocwen asked me to pay $150 or $200 to conduct a BPO. When I refused they just let the place go to auction. They flat out refused to do the BPO without payment. I have had no luck getting them down to the 1-2k most say a second should take. How much do they want and how much is owed for their position?
Possibly get the payoff demand letter from the 1st stating how much they want the second to have. Then fax this over to the 2nd.
Fremont was very easy for me to work with. I did meet the BPO agent at the property and he asked if I was trying to do a short sale and where I was looking to come in at. Sure enough I offered 85% of that number and got it.
Thank you all for the advice, the BPo was a driveby and I could not get any info from LM on who it was. Yes they should have their license pulled for being incompetent. However I did find out from the LM that the R.E. Appraisal dept increased the BPO value. I lost the short sale but contacted the Asset Manager after foreclosure and had it assigned to me as the REO agent. I still have the buyer waiting so all is not lost.