Home Selling in New York>Question Details

joeson3, Home Owner in 76201

In a short sale, what comes first, a BPO or an appraisal?

Asked by joeson3, 76201 Tue Dec 4, 2012

Also, in a short sale, how long until after the BPO and/or the appraisal is the closing date, usually?

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Joe, with your question, you are asking two separate questions because there are a BPO and an appraisal that are completed during a short sale. The BPO comes first.

But to be sure, if you are the seller, ask the person doing the BPO or the appraisal who they are working for....your lender, or the buyer's lender.

The timing of the approval and closing typically depend on the SELLER'S LENDER. The closing date deadline is specified in the approval letter of the SELLER'S LENDER and is usually 30 days or so after the approval letter is issued which is typically within 30 days after the BPO is ordered.

So, based on my recent experience with several banks including HSBC, BofA and WF, the answer to your question about how long between the SELLER'S LENDER BPO and the closing date is typically 45 to 60 days. (During this period after the approval letter is issued by the SELLER'S LENDER, the buyer gets their loan approved which includes a separate appraisal of the property engaged by the BUYER'S LENDER. If the BUYER'S LENDER is unable to close by the closing date deadline specified in the approval letter, then an extension must be requested and approved by the SELLER'S LENDER. This could delay the process.)

Brent Rice, SFR and Top Recommended Broker
The Rice Group, Inc.
Website: http://www.ricegroupinc.com
214-808-3100
Brent@RiceGroupInc.com
1 vote Thank Flag Link Tue Dec 4, 2012
Depends on the lender; the bpo is generally done when the lender receives the short sale package, wheras the appraisal is done by the buyer's lender when purchasing with a mortgage...
1 vote Thank Flag Link Tue Dec 4, 2012
A sale whose net proceeds do not cover the total mortgage obligations and closing costs is known as a short sale. When homeowners owe more on their mortgage than the actual worth of the home, it is also called a short sale. The role of an efficient appraiser like New York Property Appraiser is to perform the valuation and find out a fair market value of the property in question. Broker’s Price Opinion (BPO) is the opinion of the real estate agents on the appraisal value.

If you wish to find out whether the role of a BPO or an appraiser comes first in a short sale, it is the appraiser who needs to perform his task first. Once the appraiser offers an appraisal value of the concerned property, the BPO then needs to validate the appraisal value.
0 votes Thank Flag Link Thu Nov 7, 2013
The BPO comes first so the lender knows the current market value of the property. The closing date in dependent on how long it takes the bank to approve the sale. Some are slower than others.
0 votes Thank Flag Link Thu Dec 6, 2012
In Short Sales all really depends on the Bank involved, each one handles short sales slightly differently. If you are talking about the Buyer if and when the buyer has a mutually signed and fully executed contract, then the lender after receiving that documentation will request the appraisal.

And again for how long it will take, no one .... at least no Realtor can actually say. Again it will depend on the bank who is deciding on the short sale... some are fast, some are slow, there are big banksand smaller local ones. But in general Sellers and Buyers of Short Sales should be more patient than for a regular sale...

I hope for your sake that you are working with a Realtor, either your listing agent who if you are the
short sale owner of the property listed the property on your behalf and is in contact with the lender who is holding the loan, if you are the buyer of a short sale, please I hope you have a Realtor on your side
and you do have patience...

Good luck
Edith YourRealtor4Life
0 votes Thank Flag Link Tue Dec 4, 2012
You're question is a little open but I am going to assume you are the short sale seller.

Depending on your lender, they will order both a BPO and an appraisal, there is no rule which will come first, it will vary from lender to lender, and from transaction to transaction. Some lenders will only order the BPO, and some will only do an appraisal and some might not do any.

If you are referring to the buyer's appraisal that will depend also which comes first. The buyer's lender may start the mortgage application a little prematurely therefore the appraisal is done before your BPO. Not necessarily a good idea on the buyers part because a mortgage commitment expires, and portion of the buyers mortgage application may have to be reverified at the expense of the buyer.

Hope that helps.
0 votes Thank Flag Link Tue Dec 4, 2012
great answer, Brent!
It really depends on what the lender orders first, broker opinion or appraisal. I would also depend on commercial vs. residential property. Timing for closing would really depend on how long it takes the seller's bank to approve the sale, some banks are more efficient than others.
0 votes Thank Flag Link Tue Dec 4, 2012
In a short sale the BPO is usually scheduled by the existing lender when they decide to participate in the short sale on the property. The BPO will help establish the price that the existing lender will accept as settlement of the debt. The appraisal will be scheduled by the buyer's lender once the sales contract is fully executed. The time it takes to complete the short sale process varies in each case and depends on many things that are often beyond the control of the buyer.
0 votes Thank Flag Link Tue Dec 4, 2012
I would think that the BPO would come first. The appraisal would be done by your bank. Best of luck
0 votes Thank Flag Link Tue Dec 4, 2012
typically the appraisal comes first and the BPO is used to validate the appraisal. As for closing it will really depend on the lending institution, they all handle these differently. All Fannie Mae and Freddie Mac shortsales have new requiremnets as of June last year to respond quicker.

Sincerely,

Christopher Pagli
Licensed Associate Broker
Accredited Buyer Representative
William Raveis Legends Realty Group
914.406.9023
0 votes Thank Flag Link Tue Dec 4, 2012
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