Home > Uncategorized > Show Up to the BPO or Die!

Show Up to the BPO or Die!

I admit it, maybe I’m being a little dramatic and the headline should read:  “Show Up to the BPO or the Deal May Die.”

As most Real Estate professionals know, before a bank will consider a short sale request, the seller’s lender usually requires a Broker Price Opinion of Value (BPO) or a property Appraisal.  In either case, the valuator often requires access to the property.

As a short sale facilitator who has processed hundreds of short sale transactions, we frequently receive telephone calls from valuators who are requesting access to the property.  In each case we put the valuation specialist in touch with the Realtor to schedule the showing.  It is imperative that the Realtor meet the valuator whenever possible at the property site.

True Story

A bank requested that a BPO be performed for a property listed at $550,000.  The listing price was based on several prior sales within close proximity to the property and were all like kind in nature.  The offer of $425,000 was based on an independent appraisal obtained by the Buyer as well as various inspections reports I mention below.  We contacted the Realtor to inform him that the valuator requested access to the property.  The Realtor reminded us of a mold issue in the property, established via a mold inspection, as well as several other latent defects that materially effect the home’s value including, but not limited to, roof issues and wood destroying organisms which were both discovered in previous home inspections.  We instructed the Realtor to make a list of the defects and provide the roof and termite reports to the  BPO expert while the BPO was being performed.  The Realtor assured us that he would be present at the BPO and would provide said reports along with recent sales data supporting the offer.

Unfortunately, when the BPO valuator called to schedule an appointment, the Realtor decided that instead of showing up to the BPO, he would simply give the valuator the lock-box code and would furnish him with the reports and sales data via fax.

Needless to say, the valuation came back and the bank ultimately rejected the offer.  When asked why they rejected it, the negotiator at the bank indicated that the offer was too low and not in line with the value of the property.  We asked the bank about the latent defects and they said, “What defects are you referring too, there are none listed in the report?”

I’m sure that you can imagine my disbelief when I heard that they were not listed.  I called the Realtor who informed me that he did not show up to the BPO.  I informed him that the deal was rejected and that the bank claimed to have no idea of the property defects.  He obviously did not provide the data to the valuator.

While the property ultimately ended up closing  2 months later it was struggle.  The bank, justifiably, required evidence of the defects and closely scrutinized the sales data provided.  Once the bank’s negotiator was satisfied with the information presented he obtained approval from a supervisor and the transaction closed at a mutually agreeable sales price.

Consider the following:   If the Realtor had shown up at the onset, then the extra time, effort and energy expended by the Realtor(s), Title Company and Bank would not have been necessary.  Additionally, if the bank decides at a later date to pursue a deficiency judgment, then the extra 2 months interest may also be claimed.

If anyone has had a similar experience to this, I’d be interested to hear from them!

If you’d like a Short Sale expert to package and handle all the paperwork and communications with the lender in an attempt to facilitate a short sale on your behalf, at no out of pocket expense to you, contact Rick Schuster at   561-893-0077   or rick@homeguardiantitle.com.

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