Question Details

Jessica Hood…, Real Estate Pro in Gambrills, MD

Is anyone else getting ridiculous over valuations on properties that are pursuing short sales?

Asked by Jessica Hood & Laura Roskelly, Gambrills, MD Thu Jul 18, 2013

Lately I've had a rash of banks (Wells Fargo and Bank of America) who are using BPO agents to value properties come back with ridiculous property values. They are then giving that to me as an "approved sales price".

Despite the best marketing and preparation of the property they are giving us sale values that cannot be reached in the current market. Concurrently, they are contacting the sellers aggressively to URGE them to accept a Deed in Lieu agreement instead of short sale.

Both banks have rejected my valuation disputes despite solid, factual data supporting the offer price versus their value.

Is anyone else seeing this same trend?

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Jill Murty’s answer
I've experienced this, too. It seems to happen more when the BPO agent is not from the area and is unfamiliar with the neighborhood.

The last time I received a crazy high BPO, I changed the list price to the bank approved price and listened to the crickets chirp as I received no phone calls and no showings. I reduced the price by 5k per week until we started getting activity. The bank eventually approved the price at which buyers were interested.
0 votes Thank Flag Link Fri Jul 19, 2013
It's really a shame that the one BPO agent is a road blocker rather than a facilitator. The valuations should be accurate and appropriate; coming in consistently high does no one any favors. This BPO agent may think he's protecting the bank's interests, but he's not. It costs more to foreclose. By failing to be accurate, the BPO agent has damaged you and your nice sellers and wasted the time of all the agents and their buyers who have taken the time to see the property. It's really unfortunate.
Flag Sat Jul 20, 2013
Hi Jill, thanks for the input. In our area we also have one particular BPO agent who is familiar with area but consistently comes in high. On these deals I have 78 showings in 5 months and 42 showings in 4 months on the other with judicious price decreases from a real market high. Banks still will not cooperate. So disappointing for my dear, sweet sellers.
Flag Fri Jul 19, 2013
I have had the same problem a couple of months ago with Quicken loans and it was a FHA approved appraisal so there was nothing I could do. I have noticed on a few occasions with the comparables they are using it seems like lazy work. My short sale was appraised at top of market and 26k over the offer. I feel your pain and hope you have better luck with your dispute.
0 votes Thank Flag Link Thu Jul 18, 2013
Thanks Christopher.
Flag Fri Jul 19, 2013
Interesting. This happened to me only once with Wells Fargo and I submitted a detailed CMA with photos of subject property and like-kind properties, as well as MLS data regarding recent solds, how solds were financed with seller concessions, etc. I never gave a value on the subject property because my report offered them that information. I did however include a brief write up of potential consequences of holding the property in their inventory if it did not sell. They immediately got back in touch with me and it closed under 30 days. I think my 20 years experience in the banking industry contributed to the result. Thanks so much for the post!
0 votes Thank Flag Link Thu Jul 18, 2013
Thanks for the info. J. I've done that and they both denied the value dispute. My information was as solid as it gets. Including costs to cure the blatant deficiencies at the properties.

Please let me know what "consequences" you shared with them as that is an angle I haven't tried.
Flag Thu Jul 18, 2013
This is a trend I have witnessed from my side.
I have had two transactions, recently, that lender (one a second lender) did exactly what you stated:
urge to accept the DIL.
Imagine the banks getting greedy?!?
0 votes Thank Flag Link Thu Jul 18, 2013
Thanks Claudia, I just have no idea of what their incentive is unless they are banking on rising values. Seems that would be a little short sighted of them considering that rates are on the rise and there has been nothing to support the overwhelming consumer confidence.
Flag Thu Jul 18, 2013
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