subject: How To Get Better At The Short Sale Bpo? [print this page] As you're likely aware already, a short sale might be necessary on a property when the debtor can no longer meet the required payments to pay back the loan for the property. When this happens, the lender may select to go for the option of agreeing to sell a property at a value which doesnt fulfill the outstanding debt. Though in doing this the creditor is agreeing to a loss, it's typically seen as preferable to hounding the debtor for finances that they just do not have. This agreement is known as a short sale.
The negotiation is that the creditor recoups the majority of of the value of the loan while putting a stop to further losses, whereas although the debtor loses the home, their credit rating is left intact. This is seen as a reasonable manner to negotiate the problem of a debtor who may have become unemployed, for example. A short sale is usually agreed to, provided that the lower valuation of the home is considered by the lender to be reasonable.
This is where the BPO, or Broker Price Opinion, comes in. When a short sale is agreed upon, a broker is requested to provide a valuation on a house that the lender will agree to. If the value given by the agent is thought by the lender to be very low and will not provide a reasonable outcome, then they could refuse the short sale and initiate foreclosure proceedings.
Because the debtor can no longer meet the required payments to avoid foreclosure, it is vital that the home is sold as soon as possible, which would require a price as less as possible. This compromise between the need to sell and the requirement to appease the lender requires a fine balancing act, and some degree of proficiency on behalf of the agent.
One significant thing for the broker to keep in mind is that a full BPO is likely to reveal reasons as to why the value must be reduced, whereas a drive-by BPO, which provides information on the exterior only, probably wouldnt. If there's internal damage to the infrastructure of a house then any cost of repairs must be covered by the new buyer, which decreases the value of a home.
The broker might also do some research into the surrounding neighborhood. Are schools or hospitals nearby? How are the transportation facilities like buses or subways? What are the crime statistics for the area? What are the neighbors like? These are simply some of the factors that can contribute to a reduction in the value of a house and things that can be of massive assistance in coming to a valuation that the lender would agree to.
Be sure that you communicate clearly with the seller, after all they know the house and the neighborhood better than you do so they might be aware of something that you could have missed. Be sure to research any information that they might offer you though or else you might find yourself in trouble for putting forward incorrect information.
What you must remember at all times is that the final call lies with the lender and so it is your job to make them happy, not the seller. When making your case to the lender you must be in a position to offer information and documentation which suggests strongly that they should agree with your valuation.
