The bank's BPO or Appraisal ("valuation") of a property can be the most important turning point in any short sale transaction.
If conducted correctly, the bank then clearly understands the home's value and will likely approve market value offers.
But if the valuation is too high, the bank will falsely believe the home is worth more than buyers are willing to pay, and will begin to reject even reasonable offers. High valuations can lead to many lost weeks spent in valuation disputes or, even worse, total transaction failure if sufficient time no longer exists.
To help prevent valuation error tragedy, we’ve created an easy 5-step process that increases BPO accuracy by more than 300%.
That's right, based on a 12-month study of more than 350 transactions, short sale agents who followed this 5-step process were over 3 times more likely to receive favorable BPO or appraisal short sale results… that is, a BPO value which leads to approval without the need for a value dispute.
Differentiate BPO appointments from regular showings
Whether you use a showing service or schedule them in your office, make sure that the appointment setter knows to ask every agent if they’re doing a BPO or if it’s just a regular showing
If it’s a BPO, your appointment setter should know to direct the BPO agent’s call to you
Do NOT allow the BPO agent to gain access without talking to you first
Get ready to PROVE your opinion
Know your market and what makes your listing more or less valuable than the comps
Use the same comps that the bank will use. Avoid REO or other short sales unless absolutely necessary.
If the property’s condition is so bad that it reduces the value by more than 3-5%, you NEED a contractor’s estimate, which will show the costs of those repairs and why your listing is worth less.
Prepare a detailed CMA or even your own BPO using the comps on your list.
Gather everything that supports your case, including: MLS price change history, showing frequency, agent feedback, and if applicable, a copy of the purchase agreement.
When the BPO agent calls you (or leaves a message)
Respond promptly & courteously.
Schedule the appointment to MEET them at the property as soon as possible.
Make sure your seller client knows that cleaning or staging is NOT necessary. A BPO is not a regular showing - the home should look as cluttered and undesirable as possible.
When you meet the BPO agent
Be careful not to come across too forceful. Don’t ask for specifics or tell them what to do
Tell your client’s story. The BPO agent needs to know that your client is a victim, not a slacker and if their BPO supports the current offer, they’re going to change someone’s life for the better
At the conclusion of the appointment, casually hand them a folder which contains all of the data in #2 above. Don’t explain every little detail, just make sure that it’s organized, clearly labeled and very easy to understand. And above all, make sure they take it.
Many agents are behind schedule and oftentimes, if your data seems reliable, they will actually copy your BPO or appraisal for the short sale! And then, you have basically just completed their BPO yourself.
The next morning, send a short email to say thank you. Make sure that you attach the PDF copy of the same package of info that you handed them at the meeting.
This very short email is merely a reminder of everything you said, but you don’t need to say it again. A quick thank you with the PDF of your data can have a far-reaching, subconscious effect which, more than anything, reminds them that getting it right is super important.
For those short sales where the agents can’t perform all 5 steps, or where the BPO agent still gets it wrong (sometimes, this happens no matter what), then that’s where we come in.
The value of your listing is something the bank needs to understand and when the BPO goes poorly, absolutely no one is better at helping the bank to understand the real value of your listing, than the associates at Short Sale Cooperative.
When it comes to the major mortgage servicers and even the smaller ones, we know almost everyone who can make things happen. After processing thousands of short sale transactions, you just can’t help but form relationships with the good guys at the bank.
When your transaction needs it most, our experts will demand accurate valuation numbers and we’ll get them for you, almost every single time.
So long as your offer is market value and that value can be proven with facts, we will get you an approval regardless of how off the BPO might be.
Just remember, whether you’re working with us or not, you’re 3 times more likely to avoid value disputes if you just follow these 5 easy steps.