Home Selling in 75024>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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On behalf of a seller, I typically submit a BPO and other documentation along with the request for a short sale option to the bank immediately. Depending on the investors attached to the mortgage loan (not the primary bank servicing the loan), they may request additional BPOs (2-3) or get the property appraised rather quickly. An important factor to consider is what type of loan was used to initially finance the property. Was it a government backed or conventional loan? Each grouping may handle their short sale options differently. Good luck to you!
0 votes Thank Flag Link Tue Dec 4, 2012
It really depends on the lender you are dealing with. I have had some short sales completed relatively quickly and have had some that dragged on for a while. Sometimes the lender delayed things long enough that another BPO was required. So it's hard to give a definite answer to that question because there are so many variables.

Don Groff
REALTOR® | Mortgage Broker
Keller Williams Realty | 360 Lending Group
o 512.669.5599 m 512.633.4157
listings@dongroff.com | http://www.AustinListed.com
0 votes Thank Flag Link Tue Dec 4, 2012
Usually if you are selling a home as a short-sale, your mortgage company will order a BPO to determine that the list price and/or offer from a buyer is at market value. Many times your mortgage company will also order an appraisal - and once they do, the clock starts ticking. You MUST sell the home within a certain timeframe from the appraisal...otherwise it will expire, and you are not always guaranteed the opportunity to get another one (which means the home could go into foreclosure).

If you are buying a home - there will likely be no BPO done (unless you are buying a foreclosure, and in that case the foreclosure bank will order a BPO prior to listing it). However, as a buyer that will not affect you directly. When purchasing a home, your lender will order an appraisal to be done after your inspection period is over.

BPO = Broker Price Opinion (usually only used on short sales and foreclosures)
Appraisal = Market Value or Opinion of Value from a certified appraiser using industry standards (used with almost EVERY sale where a buyer is getting a mortgage loan).

Good luck! I hope this information is helpful.

Melissa Hailey - North Texas Top Team, Realtors
Coldwell Banker Jane Henry Realtors

0 votes Thank Flag Link Tue Dec 4, 2012
BPO comes first. Usually the bank will do 3 BPO's to determine the price of the home. The appraisal is done by the buyers' lender only after a contract is executed.

Things don't move fast in a short sale and typically closing is in 60 days eventhough I have seen longer.

Susie Kay, Realtor®
United Real Estate
III Lincoln Centre, 5430 LBJ Freeway #280
Dallas, TX 78240

Servicing your real estate need is my priority!
0 votes Thank Flag Link Tue Dec 4, 2012
Usual a BPO... then the appraisal toward the end of the process.
0 votes Thank Flag Link Tue Dec 4, 2012
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
0 votes Thank Flag Link Tue Dec 4, 2012
The lender will do a BPO or two or three sometimes. The appraisal will not occur (for you) until the loan you are getting starts to go through. Often a buyer places an offer and starts the loan process, the new lender gets an appraisal ordered and done and of course you pay for it. Then you wait and wait and the short sale never gets approved. I suggest you do as little as possible until the bank agrees to sell short but then it might be too late to get the new loan done by the time the currrent lender wants you to close. it can be a Catch 22 with short sales. Just another reason they are not for everyone.
0 votes Thank Flag Link Tue Dec 4, 2012

BPO is usually only performed when its a foreclosure and the bank needs a broker's opinion to determine what price to list. But as for short sale, its more likely the buyer's lender required an apprisial which usually get done within a week of an executed contract.

JP and Associate
0 votes Thank Flag Link Tue Dec 4, 2012
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