One of the top mistakes Realtors make when handling a short sale is just letting the appraisal or BPO happen.
The lender will have an appraisal or BPO done to help them determine the value of the property when they are considering a short sale. In some cases the lender may have two BPO’s done. The lender then uses these values to determine whether they will accept the short sale offer. So we can see that the value written by the appraiser or BPO agent is extremely important to the success or failure of the short sale.
If the value comes in too high the short sale is very unlikely to close. You’re dead in the water at this point. While you may be able to get the lender to do a second appraisal or BPO, at best they will average the two values which still likely will leave you with a value that is too high. This will also add considerable time to the short sale process.
It seems that some BPO agents or appraisers feel as if they are protecting the lender by writing a high value for the property. The truth of course is that a high value will make it more likely that the lender ends up owning the home through the foreclosure process.
That is exactly what the lender doesn’t want. They know that they will fare better through a short sale rather than through a foreclosure virtually every single time. That’s why they do short sales in the first place!
So it is very important, for everyone involved, that the first appraisal or BPO comes in at a realistic value.
Most agents just let the appraisal/BPO happen without actively managing the process. By letting the appraisal/BPO just happen though, we are leaving the success of our short sale deal up to chance.
So ideally we want to meet the appraiser or BPO agent at the property, and make sure that they understand the situation. We also want to make sure we point out all the relevant factors about the property the appraiser/BPO agent may not see or know. We also want them to know the contract amount, because they will not know it if we don’t tell them.
We need to let them know the listing history of the property, how long it’s been on the market, and why it is listed at the price it is. Then we want to help them understand that the offer we have on the property is a reasonable offer (if it is) and that it the best offer we are likely to get.
What we need to accomplish is to encourage them to write a reasonable value, taking into consideration the true situation of the property, which they won’t know unless we tell them.
If we aren’t willing to take this step, we will find it much tougher to get our short sales approved.
Chris Badger of Strategic Loss Mitigation, along with being a real estate Broker, is known as one of the top experts in Short Sales.
For more information see his blog at The Short Sale Blog
For his complete Short Sale guide for agents go to “The Ultimate Short Sale Success System”
[tags]Short sale, Realtor, Short Sales, Agent Short Sale, Realtor Short Sale, Success, training, system[/tags]
|
|