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BPO’S in Real Estate- What’s a BPO?

May 21st, 2008 category: East End LI Foreclosures, Real Estate News

tree-face Recently, we were contacted by an intermediary between a bank and ourselves to conduct a BPO (Broker Price Opinion) on a house that appears to be well into the throes of foreclosure.

BPO’S do not replace appraisals, but they do permit banks to comprehend the market from the perspective of the real estate contingent, as opposed to an appraiser that is (in our area) often “out of area”. The North fork of Long Island, while less affected than some areas, is still affected.

An example of this: we had the unfortunate experience of working with a pre-foreclosure, with the bank operating out of state. We received an offer that was in line with current pricing, and submitted this “short sale” scenario to the lender.

After accepting the contract “subject to the appraisal”, the bank established that they’d prefer to foreclose, as the amount that the appraiser came up with (significantly higher than the offer) would permit them to sell the property without paying a minor shortfall of funds (less than 1%) to them. This, despite correspondence and documentation that clearly demonstrated that the offer was as good as the bank would receive.

The result? The property did not sell at the foreclosure auction; it is now listed at a price that is 20% BELOW the offer that was rejected less than nine months ago. And, well below the amount owed by the consumer of this property. We are still livid. The buyer of the property closed on a comparably priced home within a few weeks of getting completely frustrated with a bank that just didn’t GET IT.

WHAT GIVES?

While we are going to pass on this particular request, we have aligned ourselves with a company in good standing that regularly requests BPO’S for properties in jeopardy.

We’re doing this not because we care to participate in a foreclosure scenario (one was more than plenty) but in order to remain on top of potential short-sale/foreclosure properties in the area that may well be upcoming.

Frankly, the prospect of dealing with a “bank owned” over a pre-foreclosure is preferable- the pricing is more in line with market (and minus any second lien holders, etc).

If you are interested in bank owned properties, email us to become part of a list- we’ll share what we know. The sooner properties move, the sooner the market can operate without the damaging effects of pricing that is simply too low in some cases.

North Fork Kayak If you are a seller in jeopardy, there are avenues available to you right now- FINALLY, banks are viewing the disastrous real estate market as REAL, not imagined- and becoming very consumer friendly. They don’t want your house, and we don’t want to sell it- we’d rather see you IN IT.

Now, if we can just get BPO opportunities BEFORE the foreclosure…I know of one former homeowner who would likely have had a successful short sale.