Would you play poker with a player who has seen your card? Well, that’s what some Home Owners are doing when they negotiate with a Bank on a Short Sale or list their home for sale without knowing the True Value of your home. During Short Sales banks use a type of appraisal called Broker Price Opinion (BPO).
BPO is NOT a typical appraisal that is used to underwrite the loan during a purchase since the banks are only interested in finding answers basic questions on value. One of these question is the Quick Sale Value of a home.
Quick Sale Value of the Home is a good indicator of how much the bank would collect if they were forced to sell a home to a cash investor who can close within days. However, the banks will never share this BPO value with the homeowners.
So, it’s always smart for Homeowners to find another source of valuation and don’t allow the banks to hold all the cards. After all, the banks are using big data in addition to the results of the BPO and recent sales to arm themselves when they negotiate on your loan. Negotiating with the banks without knowing your 30, 90 and 120 day sales value of your home is playing Russian Roulette with the banks. Banks want to know your As-Is Home sale that they can get in a 30 day quick sales vs if it stays on the market for 90 or 120 days.
There are public website that could provide the Home Owners good estimates based on historical sales such as Trulia, or RedFin. But it’s much smarter to get a valuation developed using a local realtor.
So, turn the table on your banker and get your Home Value before you negotiate or sell your home.