When you do a short sale, the lender will most likely ask for a BPO.
BPO stands for Brokers Price Opinion and is a process by which a real estate agent
Appointed by the lender, he goes out to appraise the property and give his “opinion”
about what the value of the property is. So the lender sends a real estate agent to the
property and it is your job to influence the BPO to go as low as possible.
This is the whole key to a successful short sale. This is why you want the lender
get in touch with you, so you can meet the estate agent at the front door and influence your
BPO to get as low as possible. To build your case, the first thing you
All you have to do is show up with a list of repairs and estimates for the property. If you
You have to go find a contractor to bid on a job or repair, go find one. The higher the quote,
the best. This is good evidence. The second thing to do is introduce yourself with
a list of comps in the area that are low. Most real estate agents appreciate you
doing some of their work for them. Give them the lowest compensation you can
find and they will decide if they want to use them or not.
When you meet the real estate agent on the property steps, simply tell them that you are the buyer and
doing a short sale of the house. You will then proceed to walk with the real estate agent.
through the property. When you are walking around the property, be sure to
Please point out any and all repairs or problems with the property. Again, you are trying to
keep the value of the house as low as possible. If you are dealing with a
nice house with minor cosmetics, you may really have to look for trouble.
Then call him the next morning to see if you were able to get the price you wanted. Sometimes they will tell you, sometimes they won’t. Just ask to find out. If they don’t tell you, call the bank. Many times they will tell you. You really have no control over this process. You can encourage low BPO, but this doesn’t always mean it will be low.
If there is someone living on the property, you can ask them to leave when
the real estate agent goes out to do a BPO. If they can’t, just tell them to stay outside.
of the way Explain to them that you will try to make the value of the house appear as low as
as possible. They may not understand why, just tell them it’s the only way to save
his house. Also, tell them not to worry about cleanliness at all, just leave it as it is.
it is. This is the only time your house can be a disaster. You have to do the value of
The property is looking as low as possible.
If the loan on the property is FHA or VA, they will not take less than 82% of the BPO.
Typically, you can expect BPO to be in the 80-90% range of
repaired value. So if you have a home that is worth $120,000 after repairs, the BPO
I’m guessing between $98,000 and $108,000. Then multiply that number by
82% and this should give you a good estimate of what to offer. If you are not a VA/FHA
loan, then you can offer whatever you want. It’s a good idea to start low, right at
In case your BPO is lower than you thought, you can always raise the offer. It’s
it’s an educated guess to find out what the BPO will be. If he comes back
high not in your favor, sometimes you can call the loss mitigation department and
tell them the BPO is too high. Many times they will work with you and
order another BPO. Whatever you do, never give up. If they don’t accept it,
negotiate with them some more. Ask them what they are looking for or what
they are trying to get. Sometimes they will tell you, sometimes they won’t. Be
persistence. Be patient. Ask, ask, ask. Part of being successful in this business is
how do you negotiate You never want to be rude to them, but let them know
where are you. Let them know what is happening to the property.