GOT THIS EMAIL TODAY.

I have no idea how you came up with $240k on this home. There is no way the comps could lead you to this opinion of value for this home. Poor BPO’s are going to keep us in an unrecovered market for an extended period of time because the banks are relying your data as if it were accurate. Because of this there will be a continued disparity between what buyer’s are willing to pay as fair market value and what these bank’s want, therefore more homes pushed to foreclosure which will push values further south. Did you make any adjustments for size, home site, beds, baths, garage and condition?

Now we know who to blame and all along I thought it was the government and its policies.

Who or what sent you that email?

Not knowing your market, I obviously do not know who is right. But I do have to ask, does the other person have some validity to their question, or is it an absolute that you are right, they are wrong?

Not just in the REO market, but in the general real estate market, many agents are notorious for telling the "powers that be" what they want to hear to get the listing.

In my market, an awful lot of FHA deals are closing signficantly higher than conventional & cash deals. And in my area, I often see cash deals closing too high on high end properties--no appraisal & a gullible buyer. Some of these buyers are going to overpay no matter how good the advice from their agents--these are generally 2d home purchases in which they buy the furniture, artwork, etc.

But, I'm suspicious of the appraisers in these FHA deals, I see yet another runaway train coming down the track.

"Telling them the number they want to hear to get the listing"....you are so unfamiliar with REO listing assignments if you are making that statement..
REO's are not assigned to the realtor who did the BPO for a failed short sale. This is a typical appraiser comment when making the argument that appraisals are somehow superior to BPO's cause the BPO agents "going get that listing" if the short sale process fails.

The REO assignment process is completely separate from the short sale process. Anyone that's in the REO business knows that. .

So, I'm guessing that you did the second opinion BPO on a short sale and the listing agent is the one who sent the email?

BTW: Thank you for pushing homes to foreclosure all by yourself!

The assertion in the email that 1 single BPO is used to establish value is absurd. So I do not take the question raised as a legitimate question.

If we go on the assumption this is a short, then the note holder is making a business decision whether to go short or let it foreclose. They are not basing that financial decision on 1 agent's Broker Price Opinion.

Right-O. In my time having done about 9,000 BPOs, I would estimate 1,000 of them were short interior orders. None have converted. In fact, most of my REO listings I spy for the first time on my initial O check...not all but most. The point being I have not done an exterior on them either (in most cases).

I am the agent that completed the interior BPO.

The email is from the listing agent that has the “short sale”.

It’s a cookie cutter neighborhood with three sales on the same street. All were between $240K and $290K. The listing agent wanted me to come in at $195K.

Yes, and your welcome for the foreclosures.

Thank you REOBOSS for your hard work in Florida which enables people to lose their homes in Colorado, which sometimes allows me to receive an REO to sell. Which keeps food on the table for my family and for me to pay my bills.

An agent called me once to discuss my BPO value - I told him that I was sorry about all the low-ball offers but I couldn't pretend I didn't find the model-match 4 doors down that sold for $30,000 more.

Sometimes, you're going to get low-balls and that's all you're gonna get and we see it all the time. I mean, we see short sales fall off the market and pop back as REO at the same, or even a higher price, and it sells quick.

It's because no one loves a short sale and it's hard to find a buyer willing to wait forever for it to close. In other words, it's not the price, it's the 3-month escrow that no one wants...

thank you.... i agree 100%

100% Agree, there is more reluctance on buyer's to sit and wait for the Short Sales to proceed, when they can get an answer on an REO in days...even though the REO may need some work.

The big thing is buyers dislike the process that short sales require them to go though. Buyers seem to be willing to pay a premium for an absolute, that is why sometimes the REO's sell for more than they were listed as a Short Sale...or maybe there are too many BPO agents pushing all these sellers into foreclosure.. Just kidding....it is the government, oh no it was the greedy loan officer who put them into the loan,, nope the Appraiser who inflated the refinance value, oh wait it is the greedy investors who specualted on values rising, maybe I am wrong again and it was all Mr. Mozillo's doing from C-wide?

Gosh this list can go on and on for who was/is or will be "Responsible".

Rant is over.

I just closed on last month that the buyers were waiting on short sale approval for 4 months, when it was foreclosed on and given to me as a listing. The bank put it on the market for the short sale price, the same buyers wrote a full price offer and I got paid. While I am very thankful REOBOSS for all your other foreclosure listings you have helped me get here in Ohio, Artsie has a good point. These buyers did suffer through the four months, were willing to take on the torture, but the bank decided to not take their offer. How in the world have you gotten the banks to support your efforts? You are magical, and again, I thank you.

it all leads back to the clinton's

you're welcome.

I agree as well and might add one more thing. If there are some buyers who are willing to endure a 3 month escrow for a short sale---are they able to? The ability to put your life in a holding pattern for a deal is limited to a select group of people who are both willing and able to live in some state of limbo for an extended time frame. Someone else posted that buyers seem willing to pay a premium for an absolute. I think that is spot on.

I don't think that the short sale process will ever be as fast as an REO sale once they are listed and marketed. No matter how streamlined the process gets there are many more things a lienholder has to look out for in a short sale once they get an offer. An REO property just has to really look at the net price like any other seller does. And since this process will never be as fast or as a sure thing as an REO sale we are going to continue to see lower prices for short sales and a limited pool of buyers for short sales. In my experience really the only people looking to buy a short sale are cash investors, or buyers that can take all the time in the world. This leaves out a HUGE pool of buyers. Especially the ones that want to buy, but their lease is up in 2 months. Or those that are moving into an area and need to close in a month or so.

I guess I should be adjusting for "short sale" in my BPOs. Does that go under "condition", "marketing remarks" or "other"? 25% seem fair?

Or maybe that listing agent took the first offer that came in? Incompetent? Hmmm...

Yes, thanks REOBOSS. I would also like to give a shout out to all you owners who 100% financed, your mortgage brokers, appraisers, the bankers, etc. Thank you.

We'll remember you for years to come.

I just completed a short sale exterior and placed my value opinion over the current LP. I got a QC blast to EXPLAIN YOUR ACTIONS AGENT. I came up with this and thought it relavent to this discussion.

Feel free to use it, critique it, ignore it or whatever.

MY FEELING ABOUT SHORT SALE LISTINGS IS THEY ATTRACT BUYERS LESS OFTEN DUE TO THE NOTORIOUSLY SLOW REPONSES AND UNCERTAIN OUTCOMES OFFERED BY THE LENDERS. PRICES ARE NOT INDICATIVE OF VALUE AND PLACE ARTIFICIAL NOTCHES IN THE MARKET. BUYERS ARE WILLING TO PAY MORE FOR A PROPERTY IN MANY CASES WHEN IT IS IN REO IF THE PROCESS OF NEGOTIATION IS PREDICTABLE AND ROUTINE.

Very Nice! I like it.
I may use it if that is ok with you.

Vinman

I mostly agree Doin'. I feel that I won an argument last month with a QCer as my value came in above a equally comparable short sale listing that was contract pending in MLS within 14 days. That mill wanted me to come in below that listing comparable. I explained to that QCer that I loath short sale homes for sale in evaluation purposes as they are not fully indicative to actual market trends. I was forced to use that comparable due to the lack of homes for sale of similar size to the subject. (The house was underimproved for the area)

My argument is if the third party does not approve of an actual list price, then you really don't know what the property is actually for sale for. If I was selling RE, I would explain my stance of this issue to a buyer and encourage them to look at REOs or LAs that put in MLS remarks that the short sale list price is bank approved. That kind of MLS remark I rarely see in my market.



I'm not sure if paying more is accurate, but it sure makes the property a heck of a lot more marketable IMO.

Way to go REOBOSS! LOL!!

Please be my guest.

I just had a short sale close about a month ago. Unlike EVERY other short sale I have ever worked on, and much to my surprise, it went smoothly, with a first-time home buyer and an FHA loan. Asset manager responded to all requests promptly, including extending deadline to close, and agreeing to a seller's concession. The bank was HSBC. Acceptance of initial purchase offer was also prompt, within a few days. If only all banks could be this smooth to work with!

About 20% of my BPOs are for currently active short sales. I have a canned response I have saved because I know they will question me. It is absurd, duh, of course it is higher. Nobody wants to wait around. Suffice to say that likely the buyer is a low balling investor anyway...

Just to be contrary and balanced, I'm going to stick up for all those "poor" short sale listing agents. I do lots of BPOs and I also list short sales and I've seen my share of agents who seem to take perverse pleasure in sticking a monkey wrench into the spinning spokes of a short sale escrow.

In many neighborhoods, there are enough comps to go "either" way with pricing. Obviously listing agents are hoping you'll go on the low end. In a declining market like I'm in, I've had several buyers ask me "what the heck was the bank thinking not taking my short sale offer? They sold it for MUCH less as an REO!"

What can I say? Someone appraised it higher....

I don't take perverse pleasure in wrenching monkeys (but a perverse monkey with a wrench is a whole 'nother thing)

Facts is facts and if the comps don't bear the price then I can't support their value.

Most importantly, I keep in mind that in a declining market, we're not to tell them what it's worth - we're supposed to tell them what it'll sell for and it'd better be the first one sold before the rest.