One of the most common mistakes agents make with listing short sales is also the one that hurts them and their clients the most. It can cause hours and hours of effort to simply slide down the drain. It can cause would be buyers to have their hearts broke. Most importantly, in can cause a homeowner to lose their home to foreclosure, often resulting in a poorer credit rating, a possible deficiency judgment against them, a possible higher tax liability, and of course the stigma that a foreclosure brings along with it.
The mistake is simply not understanding how important the BPO (Broker Price Opinion) is to the fate of the entire short sale transaction. A BPO is simply an opinion of value from a real estate broker that the lender, bank, or loss mitigation company has ordered. It’s something that is typically ordered at the onset of a short sale transaction; some banks will order an appraisal in lieu of a BPO.
The reason the BPO value is SO important is because this is the number that the negotiator and/or investors are focusing on throughout the entire transaction. They are comparing this number with the net amount of the short sale offer after closing costs, commissions and amounts going to other lien holders. If the BPO value is not in line with reality (which is often the case), the expectations and demands of the lender will also not be based on reality.
Don’t let an agent who is inexperienced with short sales cost you a foreclosure or worse. If you are considering a short sale feel free to contact me for a free short sale consultation. I have worked on over 40 short sales dating back to 2006 and currently, these types of transactions represent 90% of all my business.