WHY DO THEY NEED MORE THAN 1 BPO?
It is very common for a bank to use at leastÂ 2 bpos and sometimes a 3rd or 4th being a full appraisal from a licensed appraiser. BPOS's are subjective and unless you have an agent very expereinced and neutral,. they are not getting a true price but a price near what it was listed for. Some agents are using various personal reasons to price it real high or real low messing up ones short sale so they use 3 of them, have them checked through a desktop bpo check and average them.
THE ASKING PRICE..
Pricing a short sale can mean the difference between bank approval or 6 months wasted. Banks hate short sales, in most cases they only lose money money on them and look for any excuse to deny them. The most common problem with pricing is they are priced too low. Most buyers think the bank sets the price on the short sale. Well they do not, it is listing agents who set the price and more often that price is set too low. How can they price it too low? Well two things factor into whether that bank will be accepting that short sale.
1. The sales price has to be at or near market value
2. the bank will only discount that mortgage so much under what the current owner owes no matter if it is atÂ market value or still too high after the calculations.
Most banks will only discount the mortgage up to 20% of what they owed. Now some banks and in some area's this will change, it can increase and has, so the only way to know is to ask the contact for the sellers bank, what is the maximum amount of discount they will accept. Most banks will outline their policies and requirements. This is important because you need to know that the seller is even quailified to complete a short sale.
Most agents will set the price as low as possible and the short sale is doomed before it starts. The key in short sale is setting the price at market value and giving it time, if no offers to reduce it and keeop a log of how and why it was reduced. You should be able to submit honest and realistic comps thatÂ you used to base your price on.
PUTTING A DEADLINE ON YOUR OFFER
Alot of people are trying to beat the system by placing a deadline on their offer such as this offer expires in 30 days. By doing this you have actualy ended your chances of approval before they began. The banks just can not work that fast. The system in place has to run its course. if a bank sees a date, they will ignore it and may not even begin work on it becuase they know they cant work that fast. they will ignore your offer all together instead of wasting time, money and resources on offer that will be pulled half way through the process.
If you want to enter the world of short sales, make sure you have the time, energy and are not stressed easily. The number one tip is check for yourself what that house is worth in todays market and use that to base your offer on, do not use the asking price as you do not know if it is the value, too low or too high.
UpdatedÂ October 24, 2011
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Blog written by;
Godzyk Realty Group