Ms. Windy City,

Typically the bank or its representative agent will not give out the bpo. They may verbally tell what the bpo came in at which is usually at or near the original list price. The bank may also have another bpo done if the property sits for an extended length. Usually price reductions begin with no offers being received within a 20-40 day frame and price reductions may continue until an accepted contract is received. Just remember, there are other people out there looking to buy homes. And they all want the best deal they can receive.

As far as the commission infractions that you refer to - work with a buyers agent under a buyer agency contract and your fees will be written in the contract from the beginning of your search. Please just remember with regards to commissions that your agent generally spends just as many or more hours preparing to help you than you actually spend with the agent. If you were to break down the per hour cost that an agent is paid for the time they have invested, I think most of the general public would be surprised that is lower than you think. Please remember real estate is the only business that you must do your job then in many instances beg to get paid. In many instances we do our job only for the buyer to get sick and not want the home, buyer to change their mind and not want the home, buyer to lose their job and not be able to purchase, lender will not approve the loan for the buyer, seller changes their mind about selling, appraisal value comes in below sales price, appraisal comes in with too many repairs and no one is willing to complete those repairs, etc, etc, etc. In all these instances, many at the last minute, the transaction does not go through. AND the agent has done their job and gets NOTHING.

You asked earlier why the bank did not go back to the next offer they claimed to have. Once they accepted an offer they would have rejected the other offers. Most buyers do not just leave offers on the table. The listing agent could have gone back to those that placed offers to let them know the accepted offer fell through.... but if those buyers have already moved on they may not resubmit. That is why the property would be relisted. Banks/investors can select any offer they want to...usually it will be the one that nets them the most...but you do sound a bit jaded toward agents and their true motives. Perhaps you have had a back experience in the past or maybe it is the area of the country you live in I have to agree with Lisa that it is not worth my reputation to make $125. Professional agents have a code of ethics to follow and most do so...otherwise they would not qualify as professionals.

I am not sure what you are asking. The BPO should be the same as the comps. You're buyer's agent should be able to provide you with this information. And if you are concerned with being "ripped off" then you should ask them to show you how they are arriving with the suggested figure. Once you have this information, it is up to you what amount you want to offer. If an agent suggests you offer more and you do not see a reason to do so--then don't. But also don't be surprised if your low offer is rejected when you were advised to offer differently.

I am also curious as to your statement about "just check the commission and you'll find dozens of infractions for small amounts..." Are you saying the real estate commission has fined realtors for suggesting their clients offer more than they wanted to? I am not trying to be flippant, I really am curious.

This all clears the misconception of an offer for REO and short-sale properties, pretty much. The only other question I have is will the bank give out the BPO, or are they hesitant to do so? Also, in regards to the question asked; "Do you honestly think any Realtor in their right mind would risk their reputation or risk losing a client for $125...", the answer is yes! Just check the commission and you'll find dozens of infractions for small amounts, a rip off is a rip off to some, it's a shame, but it happens. This is in no way an insult to those reputable Realtors, but unfortunately a "bad apple" can be found in any bunch.

Hello,

I feel I need to clear the air about something. Let's suppose you the buyer of one of these properties wanted to offer $200,000 but based on my own research and knowledge of the industry I attempt to convince you to raise your offer by $10,000 to $210,000. Do you know how much more money the average realtor will see with the higher amount? Well I will tell you--it is about $125. Do you honestly think any realtor in their right mind would risk their reputation or risk losing a client for $125--because I don't.

So my advice to you is to trust your realtor for their knowledge and expertise in an area that you are most likely not an expert in. If there are other reasons for not trusting a particular realtor, then find another one. As for the CMA question--bank appraisers and realtors generally use the exact same criteria. Yes, it would make everyone's life a lot easier if there were like homes in the same community that were recently sold that could be used for comps, but this is not always the case. So the next step is to increase the search radius until a similar home is located. With current lending trends, most banks are now requiring that all comps be no older than 90 days.

I hope I have clarified the process a little better for you. Good luck in your real estate search.

Ms. Windy,

Jon Tucker with RE/MAX 100. Each property is unique in how the bank will treat them. Often the tax record may indicate the "note" value or loan it took the property back on. However the real key is to find the "BPO" or broker price opinion they currently have as the value of the property. This is usually less than the note and may decline over time if the property sits. They will immediately accept a net offer at the BPO value. Net meaning the offer less any settlement help you request. You can safely assume they will accept the BPO + Settlement Assistance = Total Sale Price.

A Realtor can help you do a Comp Market Analysis to determine value which may equate to the BPO. I always ask the seller or their agent for the BPO number. If the property has been on the market for 60-90-120+ days many banks may accept a discount off the BPO of 10% or so. Again, every lender and the investor behind the lender has different criteria. This is an art, not a science and a Realtor representing your interests who has done many Shorts, Pre-Foreclosures, and REO sales will help. Go low, but in the ballpark, and the lender will counter you. They are very motivated to move these properties.

I hope this helps.

Thanks, Jon Tucker, 443.538.4316, TuckerRealty@comcast.net, http://www.JonTuckerHomes.com.

There was a property I originally wanted to make an offer on that has been on the market awhile, I was told the bank had multiple offers, and that it was finally under contract. Well the property has been re-listed. I thought if the bank received so many offers with the listed price (as previously stated) and the original offer fell through, that they would have gone with the next offer, or anyone of the many they said they have.

I think the banks and Realtors what the highest offers for obvious reasons, and it doesn't necessarily mean it's the best offer for the buyer. I mean, how do you even get a good CMA if no homes have been sold in the area for months?

Every lending instruction has different criteria they use when selling property. I always meet with my clients and we look at the comps in the area including other bank owned property. Then we set up a strategy of how to write a contract for the house they want to purchase. You can write into the contract that the seller cover closing cost but that does not mean they will, they have the right to counter offer. What you really want to do is write a fair and reasonable purchase agreement that the seller would have a had time not accepting.

Ms. Windy City, without knowing the details of the properties, I would say that in most cases you will not be able to get closing costs paid by the seller for a bank owned property. However, if you would like to ask for them, you can put that in your offer. You may be getting advise from agents who know the market and feel that the home is aggressively priced, and there will be multiple offers on the home. In that case you should put in your "highest and best". If you r e a l l y like the home and did not put in your highest and best and lost out to a buyer who did.. you will probably walk away wishing you had done your best.