Just like the dysfunctional political system in Washington DC creating grid lock; banks are also holding the Real Estate industry hostage! One of the manifestation of this grid lock is the absurd valuations as part of our San Jose Short Sale Negotiations. As you are aware, banks use Broker Price Opinions (BPO), not formal appraisals to determine value. And often times the Broker/Agent sent to complete a BPO order is not from the immediate area and they are unaware of the local market dynamics. So, they typically over-price the property which creates challenges to marketing a Short Sale property.
This leads to protracted delays in marketing the Short Sale Listing since no buyer is going to over-pay for a California property just because an Asset Manager who lives in Ohio think the property should be sold as a higher price. Some banks do allow for challenges to the Valuations, but that also adds another delay of more than a week to the Short Sale process which is frustrating for buyers and sellers since it creates uncertainty.
But perhaps we have no one but ourselves to blame to allow the Banks and Asset Management companies to completely reduce us to gophers! This is akin to what the HMOs have done to the delivery of the Health Care where the doctors and medical professional are hostage to the insurance companies and their middle men. There are plenty of other examples on how the banks are holding the Real Estate industry hostage from controlling and dictating fees, commission to valuations.
Fortunately we now have developed processes in anticipation of these valuation problems which are helping create a more predicable outcome for our Short Sale Listings. After all, BPOs are some one’s opinion and expecting two different Brokers to arrive at the SAME exact price of a home using different comps is absurd! But because the banks do not share their BPO with the Short Sale Listing agents, they are creating this grid lock on valuations.
So, if you like some Short Sale Expert Advice before you list your home for sale, Contact Us since we understand how to talk to you lender.