The Banks Value is to High.... Looking for suggestions.

I have recently been stonewalled by the bank on a few short sales where they are asking more money than I can possibly get for a property.  I am just wondering if there are any good suggestions in helping the bank see the light through the forest when it come to the proper pricing/value of a property.

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I had that occur recently as well. I asked the bank for another BPO. I suplled comps that supported my price, I sent pictures of the home and why I thought the price that I had was market value. That seemed to help them a bit. Don't get me wrong this took a whi;le but as I dropped the price 10K every two weeks and called them weekly to tell them the same story I finally got someone to listen. Now I have an offer and the file is in process to be assigned a negotiator soon. WHatever soon is to a bank :o)
Did you influence the BPO properly?
Joseph- I did try to work with the agent doing a BPO. This particular agent got their feathers ruffled when I started to talk comps with them.
Kevin, I always send a listing History and sometimes an explanation letter to the negotiator so they have a better reality check on value. You might want to consider changing the lock box out to a contractor's box and modify the lisitng so the BPO agent has to call you. Some will be understanding and others won't be but explain to them that they are not there to possibly get the listing and keep the value realistic.
I've been using a "stair-step" model on my listings and haven't had this issue since. We drop the price 7% every 10 days (if the listing allows) until we reach the price point where an offer comes into play.

The power of this is when the bank says this is worth "x" and I have an offer at "x-$20,000" ... I can walk them through the pricing and they quickly shut up.

I started this after I had a bank swear a home was worth $90,000 and we had three offers at $35,000. Two days after they foreclosed they sold it to an investor (one of my offers) for $22,500. Hmmm .... wonder which one was right on the price :p
Toby, that tactic is unnecessarily wasting time. Do a realistic CMA, and set your price accordingly. Justify your list price with recent closed comps and send your CMA to the lender to set the tone. You are not being paid to market for the bank, you are being paid to get an offer and close it. As long as you can justify your offer/list, you can get it done. As a negotiator, I require that all lender contact goes through me, That way, a bpo agent has to set the appointment with me, then I have the listing agent meet the bpo guy at the property and I physically walk them through it, noting any defects. I give them my CMA and contract and ask the what they think. I get a rapport with them and ask them to help us out and help me get this closed. 90% of bpo's will come your way correctly by doing this. If it doesn't be ready to submit evidence such as recent CLOSED comps justifying your offer and learn how to contest the banks valuation. It's a specific process and can absolutely be done.
If the value of the BPO is too High, you have 2 options. Try to convince the negotiator and put doubt into his mind that that value is correct. Unless there is doubt then they will not order a new one or a second one. The other option is to keep the deal alive for the 90 day period for the value on that BPO to expire so that they have to order a new one. The name of the game here is to keep the deal alive and eventually you will close it.

There have been a few times that we have purposely gotten the file closed out to start over so that we could work with a negotiator that is more ready to work with us and order a new BPO.

Here is a nugget. If it is an FHA file that is being shorted, those BPO's last for 6 months and they won't order a new one. You have to fail out the file and let it sit for 2 months and then start again. Keep your eye on the foreclosure date so you don't lose it. This is the only thing we have been able to do for FHA values that are too high. this was a recommendation from a B of A negotiator for FHA.

The best defense is a good offense. We always meet the BPO agents at the property with a BPO that is already done and try and befriend the agent. They are not supposed to use our BPO's but we know for a fact that it works and saves those agents a lot of time and we run into those same agents over and over again.

Sorry about the novel, but if you are still reading, you probably needed it.

Brian
Brian is spot on. Also, there is a secret application form to fill out for FHS/Fannie/Freddie to challenge value. Don't tell anyone I told you. Wink.
Joe Do you have info on this secret form? shy@shysells.com  I have a ss with hsbc/beneficial. I met bpo agent there with comps, repairs, etc...and walked thru with this 18 yr old that got lost twice, not from this area. Price came back at $370  it won't even appraise at this price..we are at 29700. my buyer is doing conventional, not fha...20% down. I have gone to 2 supervisors over her head, her supervisor and his supervisor. Trying to get an answer. I've submitted a value dispute of comps,sex offenders, crime stats, conflict of interest of bpo reo agent and list of 20k of repairs needed on home. only thing I have not done yet is order an appraisal...should I??? any help on what to do next?

Hey Sheyenne,

 

Have the seller order an FHA appraisal on the property. (as long as you know it will be alot lower then where the current value is) Because that FHA appraisal stays with the property for 4 months and the negotiators should know that. If they don't know that then you will need to tell them that if this buyer walks then they will have an issue with any buyer that has to get financing. They have to come down to at least that value or at least it will give them enough of a justification to order a new BPO.

 

If the BPO is more than 90 days old then you can get them to order a new one for most servicers. That is another option also.

 

3rd is if you don't want to spend the money on a full appraisal then contact an appraiser that you know and have him to a desktop appraisal. That is where they don't actually go to the property but do a review of the mls listings and give his value with his appraiser stamp on it. That will usually trump the BPO.

 

Hope that helps.

Brian

If you are totally at your wits end try to get your seller to pay for an FHA appraisal and send that into the bank.   They cannot argue with that!  Good luck, Sheyenne!

 

DUH- that is what Brian said...sorry to reiterate Brian's post-he is spot on. 

Kevin, we do a combination of what Toby and Joseph do.  The listing price should be dropped every two weeks until an offer comes in...shows great history and also a CMA and comps to the BPO agent. 

Our fool proof method is having the seller order an appraisal before we even start.  This really depends on what the sellers have for cash reserves, but we can convince most sellers to get it done.  It's better to spend $400 up front on a solid appraisal then not have the sale go through at all. 

 

When the BPO agent comes through, we just hand off the appraisal.  Usually works perfectly. 

 

When we've had situations that the price was unrealistic, we had the buyers lender perform their appraisal.  I had a seacoast condo through BOA come in at $400,000.  We knew this was unrealistic, so the buyer's lender did their appraisal and we submitted it to BOA.  They renegotiated the price after that.

 

Keep pushing...there are options..

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