Real Estate Short Sales - The Importance of the Broker Price Opinions (BPO) with Short Sales
The price of a piece of real estate is dependent upon one thing, the broker price opinion. With a low BPO, the sale will be cheap and quick to ownership. With a high BPO, you can rest assured, that short sale you had envisioned may not come true. With a lower price, the homeowners will be out from under that loan in no time flat.
To understand how real estate short sales work, you must first understand the broker price opinion (BPO). When a home is supposed to hit the market as a short sale, the price of the home will be set by a real estate agent. The agent will walk through the home and gauge how much the property is worth using the size of the home, the condition of the home, the size of the home lot and the prices of homes in the local area.
If the real estate agent finds the home to be in relatively good shape, the price will be higher than if the home is gauged as being in not so great shape. The key to settling a BPO on the low end is to convince the broker that the home is worth much less than they think.
In order to do this, you must come prepared for battle. First in line are comp home prices. Research all of the comp home prices in the area. Compare these homes inside and out to the home the broker is place the price option upon. Do not sit there and allow the broker to quietly roam the home, be active and voice your opinion, followed with the research to back up why you feel the price should be lower.
During the walk through point out all of the blemishes in the property. Any damage to the walls, doors, windows, the age of the home, the foundation, the flooring, the bathrooms and the kitchen are only a few places that there will inevitably be problems that will cost money to fix. Tell the broker about each and every one of these problems. But, you must note, the better shape the home is in, the less likely your information will influence the overall broker price opinion (BPO) and the chance of a cheap real estate short sale.
If the homeowner is directly involved in the real estate short sale, advise them to make sure all of the furniture is removed from the house before the broker visits. Also advise them not to clean or straighten up the home before the broker arrives. The dirtier the home looks, the less the broker price opinion will be.
After all of this work, the broker will set the price option for the home and advice the lender of the appropriate price with which to list the home. For the homeowner trying to get out from under the loan, the lower the real estate short sale price, the more likely they will be to sell the home quickly and that is the point of a “short” sale.
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