{"id":363,"date":"2013-11-10T23:21:00","date_gmt":"2013-11-11T03:21:00","guid":{"rendered":"http:\/\/www.realestatejunkie.com\/blog\/?p=363"},"modified":"2013-11-10T23:23:54","modified_gmt":"2013-11-11T03:23:54","slug":"what-makes-or-breaks-a-short-sale","status":"publish","type":"post","link":"https:\/\/www.realestatejunkie.com\/blog\/what-makes-or-breaks-a-short-sale\/","title":{"rendered":"What makes or breaks a short sale?"},"content":{"rendered":"

\"short<\/a>Many Realtors and Investors really don\u2019t know the secrets to a successful short sale.\u00a0 They think just because they make an offer close to market value that their short sale should go thru!\u00a0 Obviously, that is not correct.\u00a0 The secret to a successful short sale consists of several things including 1) listing price and 2) broker price opinion\/appraisal on the property.<\/p>\n

Let\u2019s start with the listing price.\u00a0 How do real estate agents get paid?\u00a0 By commission right?\u00a0 Are they not taught that they need to list the house as high as possible to get the best price for the seller and the highest commission for themselves?\u00a0 So \u2026 when a Realtor is not trained how to do a short sale, what price do you think they list the house at?\u00a0 They list it for as high as possible.\u00a0 Unknowingly, they are doing a disservice to the sellers, buyers and themselves; as it is the Short Sale Lender that tells the agents, sellers and buyers how much they are willing to sell the property for.\u00a0 So, when the Realtor lists the property high, it encourages the BPO agent, who is also a Realtor, to try and reach for the list price. Remember, they use to be Realtors receiving commission and they too would list the property as high as possible.\u00a0 The only designation that I hold as a Real Estate Broker is SFR which stands for Short Sale Foreclosure Resource.\u00a0 I took this class just to see what the Realtors are being taught on short sales.\u00a0 I was impressed that they also recommend that the property be listed LOW not high so that the BPO Agent will provide the Short Sale Lender with their own value instead of reaching for list price.\u00a0 Just like an appraiser, they are also encouraged to reach for the list price since 99% of the time appraisals do not come in higher than either list price and\/or the purchase price which a buyer is willing to pay.<\/p>\n

Short Sale – What is a BPO or an Appraisal?<\/h2>\n

What is a BPO or an Appraisal?\u00a0 Both are just opinions of what the property is worth.\u00a0 Even Short Sale Lenders don\u2019t agree with the value that an unrelated third party person such as a BPO Agent or Appraiser provides to them.\u00a0 When they don\u2019t agree with this amount, they send their file up to a department called a Reconciliation Department who in turn will literally look at Zillow (which you and I know is incorrect) and other websites to determine the value the property should be versus using what \u00a0was provided to the Short Sale Lender by the BPO Agent or the Appraiser.\u00a0 The Short Sale<\/strong> Lenders also use an automated system to re-evaluate the property so \u2026 when working on obtaining the value from the Short Sale Lenders, your negotiator must always ask \u201cIs this a reconciliation value?\u201d\u00a0 Knowing the answer to the question will allow you to dispute value.<\/p>\n

A value on the property obtained from the lender normally lasts 90 days.\u00a0 During this time, your negotiator has the right to dispute the value providing comparables, repair bids, crime reports in the area, sex offender reports and anything else that would help dispute the value which they have.\u00a0 If you win the argument that their value is incorrect, then they will order another value on the property.\u00a0 Should this property be an FHA property, then the lender\u2019s value lasts for 4 to 6 months and this value is harder to argue unless your buyer obtains an appraisal for a lower price.<\/p>\n

I do want to say if a buyer provides the Short Sale<\/em> Lender with an appraisal done on the behalf of the buyer for funding purposes, 99% of the time, the Short Sale Lender will accept that appraisal as value and will reduce their amount.\u00a0 However, I have also seen when I have provided an appraisal to the Short Sale Lender to use as argument, they will turn around and sell the loan and we had to start all over again on the short sale with a new Lender.<\/p>\n

Now let\u2019s talk about the major mistakes that happen when NO ONE meets the BPO Agent and\/or Appraiser for the Short Sale Lender.\u00a0 If the Short Sale Lender has changed the locks, that means that BPO Agents and\/or Appraisers have their own key or code to get in without anyone being present.\u00a0 In addition,\u00a0 if the listing agent put a electronic lockbox on the property, then the BPO Agent and\/or Appraiser can get in without telling you.\u00a0 I teach you in my home study course that there are 13 crucial steps to a successful BPO\/Appraisal.\u00a0 Below are the 5 of the steps to a successful BPO\/Appraisal:<\/p>\n

    \n
  1. When the BPO Agent contacts you by telephone to schedule appointment to do the BPO, you need to start building rapport immediately.\u00a0\u00a0 Read the Script of Initial BPO or Appraisal.\u00a0 Ask her \u201cif she is aware that the property is in foreclosure?\u201d<\/li>\n
  2. Ask her \u201cwhen is the best time to meet at the property?\u201d<\/li>\n
  3. Tell her \u201cWe are working with the Seller and the Bank to liquidate the property and the Bank is looking for a \u201cQuick Sale or AS IS\u201d value.<\/li>\n
  4. Schedule a time convenient for you and her since you NEED to be at that appointment; this is not an option for you.<\/li>\n
  5. There is a list of documents that we provide in our BPO Package when we meet with the BPO Agent and\/or Appraiser.\n
      \n
    1. A File Folder that is marked with \u201cFORECLOSURE\u201d<\/li>\n
    2. The File Folder should that is marked with \u201cWe are working with the Seller and<\/li>\n<\/ol>\n<\/li>\n<\/ol>\n

      The bank to liquidate the property.\u201d<\/p>\n

        \n
      1. The Purchase Agreement which you submitted to Loss Mitigation.<\/li>\n
      2. Provide a copy of the Hardship letter.<\/li>\n
      3. Newspaper Articles of the market decline <\/b><\/li>\n
      4. Low Comparables only <\/b>that have sold in the last 3 months and 3 low Active Comps<\/li>\n
      5. Contractor Bid or Repair Cost, if any<\/li>\n
      6. List of sex offenders<\/li>\n
      7. Crime Report of the area<\/li>\n<\/ol>\n

         <\/p>\n

        However, I do want to caution you that not all BPO Agents or Appraisers will take your folder as they believe it is against their guidelines. I was told by a BPO Agent that she is suppose to spend at least 20 minutes in the home and I am hear to tell you that they spend less than 10 minutes\u2026more like 5 minutes!\u00a0 BPO Agents are paid $50-$75 for a BPO plus a bonus if they return it within 24 hours.\u00a0 Appraisers will receive $125-$300 for their report with no bonus for fast turn around.<\/p>\n

        Based on this article, I hope you all understand that you MUST meet the BPO Agent\/Appraiser at the property for their value.\u00a0 Failure to do so will leave you 85% of the time with a higher value due to the fact that the repairs needed for the property were not taken into consideration.\u00a0 Also, repairs such as carpet and paint are considered cosmetic.\u00a0 In addition, outdated fixtures, bathrooms and kitchens are not considered as long as they are functional.<\/p>\n

        One last thing, even the best negotiator can\u2019t argue value on a home unless they have aminution such as low comparables, repair bids, appraisals, and other things I have mentioned in this article.\u00a0 So meet your BPO Agent and\/or Appraiser at the property and provide them with the information they need and if they fail to take it, be sure you physically point out all the damage in the home, as the agent walks through, so that they take pictures to provide it back to the Short Sale<\/span> Lender of the true value of the home!<\/p>\n

         <\/p>\n

        Happy Negotiating!<\/p>\n

        Kimberlee Frank<\/p>\n

        www.SellFastRealty.com<\/a><\/p>\n

        www.ForeclosuresGonewild.com<\/a><\/p>\n

        www.RealEstateJunkie.com<\/a><\/p>\n

        www.ShortSaleNegotiating.com<\/a><\/p>\n

        Like me on www.facebook.com\/foreclosuresgonewild<\/a><\/p>\n

        Like me on www.facebook.com\/sellfastrealty<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

        Many Realtors and Investors really don\u2019t know the secrets to a successful short sale.\u00a0 They think just because they make an offer close to market value that their short sale should go thru!\u00a0 Obviously, that is not correct.\u00a0 The secret to a successful short sale consists of several things including 1) listing price and 2) […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[21],"class_list":["post-363","post","type-post","status-publish","format-standard","hentry","category-free-articles","tag-short-sale"],"_links":{"self":[{"href":"https:\/\/www.realestatejunkie.com\/blog\/wp-json\/wp\/v2\/posts\/363","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.realestatejunkie.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.realestatejunkie.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.realestatejunkie.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.realestatejunkie.com\/blog\/wp-json\/wp\/v2\/comments?post=363"}],"version-history":[{"count":0,"href":"https:\/\/www.realestatejunkie.com\/blog\/wp-json\/wp\/v2\/posts\/363\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.realestatejunkie.com\/blog\/wp-json\/wp\/v2\/media?parent=363"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.realestatejunkie.com\/blog\/wp-json\/wp\/v2\/categories?post=363"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.realestatejunkie.com\/blog\/wp-json\/wp\/v2\/tags?post=363"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}