Are you frustrated with your Short Sale negotiations? Are you surprised at the value assigned by the bank to your home?
Well, you are not alone since banks use a cheap appraisal called Broker Price Opinion (BPO). A BPO is NOT a typical appraisal since it is utilized to determine to As-Is Sale, Repaired-Value and Quick-Sale-Value of your home in a foreclosure sale.
Ironically, your bank will not share the results of this BPO with you and it’s up to you and your Short Sale agent to find comps to challenge the value assigned to your Short Sale transaction. However, your bank will never share this information with you if you are negotiating a Short Sale with them.
Most lender do have an appeal process for the value. So, obtain the forms associated with the value challenge and fill them out. You should also document with photos and inspection reports any damage to your property that might not have been discovered by the bank’s BPO.
Also make certain that your Short Sale agent uses the recent sales located within 2 mile radius of your home and adjust them for size, age, amenities, floor plan, functional utility, pool and other features. Avoid making large adjustments since your lender will disallow them. However, include repair bids and inspection report as proof of deferred maintenance. If you repair cost are more than $10,000 we would recommend getting additional bids. Finally, make sure your bids are from licensed contractors and their includes their State contractor license.
Armed with repair bids from 2 contractors and inspection reports, you should have no problem challenging the value assigned to your home during your Short Sale negotiations.