As an agent doing short sales in Chandler and the surrounding area, sometimes I will get a counter offer from the lender that will make me wonder exactly what they were smoking.
Yesterday I had a Bank of America deal that did just that. We had received approval on a short sale in August at $131,000. By early September we lost the buyer. So back on the market the house went. The issue we were facing was a rapidly declining market in this area.
We put the house back on the market and in about a four weeks we received an offer at $125,000. We submitted the offer to the Bank of America short sale department and in just three weeks they ordered the new BPO to determine current value, assign it to a negotiator and send us a counter offer. But that is where the issues started. The counter offer was for $157k. What? 157k??
I pulled up comparable properties in the subdivision and I cannot find anything in the last three months that has sold for more than the $125k we had the offer in for. Then I found it, this one house that sold for $254k!
Now why did this house sell for so much? Maybe it was because it was 1200 square feet bigger than our listing? Maybe it was because of all the upgrades throughout the house that our listing did not have? Maybe it was because this house was a show house for the developer, a model home that had never been lived in. Most likely it was because of all the above.
As you can see this house is not comparable to our house at all. Does Bank of America know this? No, they only see the BPO that the agent submitted. They can only make decisions based on the information they have and now that I have provided them with all the information maybe we can get this approved quickly.
Hey Dean, i think you nailed it on this one. The broker price opinion (appraisal) has such a huge impact on the overall price the bank is willing to accept. It is so important that the value comes in correctly. We have a problem with out of area agents doing bpo’s and are bringing in values way to high. The bank’s take this number and base their approval off of it. Even if a buyer wanted to purchase the property at that value, we have found that the buyers appraisal for their loan does not come in that high and then have to cancel the deal. The banks are usually unwavering in their value and we end up having to wait out the 90 days the bpo is good for and reorder the bpo.
I have also had many short sale transactions fall apart due to ridiculous bpo’s. It is incredibly frustrating!