Posted by Stew(NE) on March 12, 2002 at 09:58:11:
The BPO was higher and I was trying to negotiate a lower price with the 2nd Mortgage lender. So it husrt me. Maybe you should look at each case before you automatically bow out, IMHO.
Good Investing
What are BPO’s - Broker Price Options - Posted by Greg (Dallas)
Posted by Greg (Dallas) on March 11, 2002 at 21:03:17:
Can someone explain to me what a BPO is???
Re: What are BPO’s - Broker Price Options - Posted by Glynn-TX
Posted by Glynn-TX on March 13, 2002 at 15:00:12:
A Broker Price Opinion, (BPO)is an estimate of value based on the sale of comparable properties in the same area. Banks/Mortgage companies want to know what a property is worth after it goes into default, but before it goes into foreclosure. Not all properties in default will go to foreclosure, most are cured by the homeowner or sometimes fast-moving investors. Therefore, the banks would rather order a $50 BPO than a $400 appraisal. Makes sense for the bank as a BPO done by an experienced broker will be within 5% of a full-blown appraisal. As neither BPO’s or appraisals are an exact science, only time will tell who is closer to the selling price. Incidently, although JoeS claims brokers do not have to justify the value they assign to a property, I have had to submit comps and photo’s for every one of the over 800 BPO’s I have completed in the last five years whether they were done for HUD, VA, REONationwide, Vitalizers or any of the other thirty-plus clients I worked for.
Re: What are BPO’s - Broker Price Options - Posted by JoeS
Posted by JoeS on March 12, 2002 at 10:57:17:
I guess I came across as a ogre! It really depends on what the market is doing in your area, and what the intelligence level is of the broker doing the BPO! In my area (upstate NY), most brokers want to kill the deal for you. They do not like the fact that we buy these homes for only 50% of their value and sell for full value. After all, this is AMERICA! If we are not doing anything illegal or unethical (some realtors cannot make that claim) then let us do our business.
Sorry if I sounded course, it is my intention to give good advice.
Re: What are BPO’s - Broker Price Options - Posted by ken in sc
Posted by ken in sc on March 12, 2002 at 07:08:42:
JoeS is correct in what they are, just someone else’s opinion of value for the lender to consider. But I have had luck with them. I bought one house on a short sale. The owner owed $75,000 to the bank but the house was in bad condition. I offered $44,000 and after the BPO, thebank accepted the short sale.
So I guess it depends on the broker and the bank. Don’t let Joe’s bad luck keep you from trying.
Ken
Re: What are BPO’s - Broker Price Options - Posted by JoeS
Posted by JoeS on March 11, 2002 at 22:10:10:
Sorry Greg for the smart answer. I was in a mood! A BPO is this; a real estate brokers “professional” opinion of value, based on their “vast knowledge” of property values. I said deal killer because usually when a lender asks for a BPO after an appraiser has submitted an appraisal of the property, a broker will submit an opinion considerably lower than the appraised value, thus killing the deal. AND, a broker does not have to justify his opinion! But, an appraiser has to provide 3-5 comps justifying HIS value.
Whenever a lender says that they use BPO’s, I say “thanks but no thanks” and move on to another lender. Why bother to pay for an appraisal?
Re: What are BPO’s - Broker Price Options - Posted by JoeS
Posted by JoeS on March 11, 2002 at 21:13:01:
Usually deal-killers!!
Re: What are BPO’s - Broker Price Options - Posted by Hank
Posted by Hank on March 12, 2002 at 12:33:04:
I’m no expert, but wouldn’t a lower BPO incline a bank to take less in a short sale agreement? I mean, the less equity the bank sees the better, right?