Bad BPO? Fight it.

When you have a bad Broker Price Opinion  for your short sale in New Hampshire and Massachusetts – FIGHT IT.

I’ve learned some interesting things from the agents we work with.  I can’t tell you the number of times I’ve had an agent call into the office after a BPO was finished only to learn the BPO agent was also an REO agent for the same lender.  This is a BIG red flag.  We try to do our homeowner FIRST and make sure the person valuating the property is NOT the same person who will get the listing if the property is foreclosed upon.  Sometimes, they slip through the cracks.

Today I wanted to outline, what a bad BPO does to the short sale.   In today’s blog, I’ll be using a Chase short sale we are currently negotiating.

The house was originally listed at $139,000 after we worked carefully with the listing agent to pull  comps.  The house went on the market in May and had a June foreclosure date.  There was NO activity at $139,900 so we dropped to $129,000 with one showing and no offers.  WE HAD to list this aggressively as the auction was weeks away.  {side note – In New Hampshire a lender only needs to give public notice of 3 weeks before they hold the auction.  I believe the same holds true in Massachusetts} – We dropped the price one more time to $119,900 and got an offer in for $110,000.  The property needs a TREMENDOUS amount of work.  We were notified the auction was canceled.  PHEW!!  One thing down and many more to go.

Here’s where it gets interesting.  We got a call for the scheduling of the BPO.  The agent was from Lowell, Massachusetts.  Our short sale was 20 miles over the New Hampshire border.  This is the first thing that gets me.  Chase decided to hire someone for $60-$80 to come to a community that they likely knew NOTHING about.  The agent indicated to my listing agent that she had over 10 years experience.  Of COURSE we Googled her and she didn’t have one listing, but at least she wasn’t an REO agent.  So, the listing agent went to the property at the designated time to let in the BPO agent.  Low and behold out of the back of a beat up car filled with teenage boys, stumbles this 20 something with a camera.  This was a VERY bad sign.  The listing agent tried to show comparable properties, but the 20 something wasn’t interested in listening to anything about the property.  She took her pictures and left.  We knew this was a very bad sign.

On my side of things, we were told the seller was eligible for HAFA so they enrolled and we submitted  the paperwork.  About a week and ½ after the BPO was complete, I finally got through to a RUDE customer service rep, who told me the valuation was $160,000 and Chase would want $170,000.  I got off the phone and was scratching my head.   I got a hold of the negotiator and told her what happened with the BPO.  She was completely unconcerned.  I explained we needed a new valuation and she stated we needed to submit 3 comps within a 1-3 mile radius if we wanted to dispute the valuation.

In July the buyer’s got their own appraisal done which ended up supporting their offer price and I took the appraisal along with the 3 comps I found and immediately submitted.

After repeated attempts to contact the negotiator, I finally called into customer service to complain that there was no response and to my surprise I was told by the rep that the file closed and sellers were UNenrolled in HAFA.  When I asked the rep the reason why, I was told the investor denied because the offer was too low.  Did they SEE the appraisal? Did they REVIEW the comps?

Not being one to throw in the towel I asked the rep when the BPO expired.  We were told August 19th a new BPO would need to be ordered.  We waited about 3 weeks and resubmitted the same package on August 19th.  There was an auction scheduled September 12th.  We called every 2 days and up until September 7th a negotiator wasn’t assigned, which is RIDICULOUS!!  It should have been assigned within 7 days of receipt.   I escalated the file and called the next day.  I didn’t get the negotiator but did get an escalation manager who told me the auction was canceled.  (TIP – never take what a lender says on the phone as truth.  TAKE THE EXTRA STEP and call the trustee for the sale, which we did and it WAS canceled)

It’s September 21 a second BPO was ordered.  We are awaiting feedback from the negotiator.

The point of my article is one bad BPO can throw a short sale off by a few months, so even though our average closing time from offer to close is about 90 days, if you’re dealing with a bad BPO or some other issue, then your short sale will take TIME.   Get a buyer that’s patient.  Thankfully ours is.

Don’t let a bad BPO derail your short sale.  PUSH PUSH PUSH.  If we had just let the property go, it would have been foreclosed upon, and that doesn’t do ANYone any good.
Maryann Little, Short sale negotiator – Massachusetts – New Hampshire

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