Orlando Realtor – Video transcript who decides the value of a short sale?
Hello, John Conde here with https://orlandorealtyconsultants.com/ , and today we’re here to talk about short sales
John Conde: OK first question?… The woman with the Orange hair
Audience: Who decides the value of a Short Sale?
John Conde: OK…great question and a crucial part of the short sale process.
The valuation of a short sale, as determined by the short sale lender, is probably the single most important factor of the transaction. ….The way it works is; after we submit an offer to the bank, the bank will then order a BPO.. AKA [Brokers price opinion] on the property.
This person will usually be a local realtor that will go out to the property, and after doing their research on recent sales in the neighborhood, will give the lender their opinion of what the property is worth.
Whatever, the BPO comes in at will be the negotiating point between the lender and potential buyer.
John Conde: Next question…
Audience: Does it matter if the house needs repairs?
John Conde: Yes, it does matter and that is something that they are supposed to take into consideration when giving their estimation of value.
So they do the BPO…Now At this point there are 3 things that can happen that will dictate what follows.
1… The BPO comes in at a fair number that everyone is happy with and we proceed to closing.
2… The BPO comes in too low and the bank insists on another one being done… It happens sometimes.
3…The BPO comes in so ridiculously high that the buyer threatens to walk.
Now when this happens, you will find out what your short sale agent is really made of….The agent can choose to do one of 2 things.
#1- Just accept what the bank says, let the deal fall apart and pray that a new buyer comes along
or
B- Do whatever it takes to prove to the bank, that the BPO agent got it wrong.
Now at our company, We do this by preparing an in depth report of our own… called a CMA which is also known as a comparative market analysis]. This report contains even more information than the BPO agent provided them with.
What a CMA basically comes down to is a list of Active, Pending and Sold properties in the area… and the whole purpose behind this is to get the lender to order another BPO or if we’re lucky they’ll just use ours.
I hope this was helpful in answering your questions. Remember…we’re here to help…it’s up to you to take the next step…Thanks for watching
