How You Can Influence the BPO for A Short Sale Investment6 months ago
You are wanting to buy an investment property through a short sale, but you want to get the best possible price. Everyone else is motivate to get the highest price possible, while you want to get the best value. You need to influence the Broker’s Price Opinion (BPO) to make the purchase fair and a good value for you. So how do you accomplish this?
You need to start by doing your homework, in depth. Find out what prices similar houses in the area have been selling for. Make a complete list, highlighting the ones that are closest to your investment in size, and condition. The broker will also have this information for their evaluation for the short sale, but you need to know so you can speak to the broker on even knowledge levels.
The next part of your homework involves inspecting the home with a fine tooth comb, and a camera. Check everything. Look for water spots or leaks. Check the carpets in every room for wear or stains. Check for holes in walls, floor problems, and any other cosmetic issues you notice. The electrical service, breaker boxes, fixtures and outlets should all be checked. You’ll need to check the roof, make sure you know the age of the roof. Check the exterior siding and foundation, make a list of every repair that may be needed.
Now that you have your list of repairs and issues, put a price on those repairs. Be honest in your appraisal of cost. The broker is also a house expert, so they will know if you’re over inflating your costs.
Make sure you request a full BPO evaluation, and that you will be there with the Broker. If at all possible, make sure the home owner is not with you. You don’t need contradictions to your list of items while you’re walking through with the broker.
As you walk through with the Broker, point out issues you have noticed, take pictures, discuss the repair costs you believe are needed. Ask questions, and take pictures along with the Broker. You are helping them to understand you too are an expert.
As the BPO inspection is coming to an end, ask the Broker for their evaluation. They may or may not answer you. This is the time you want to share your market evaluation of the area, and explaining briefly how you came to your conclusion. Don’t be confrontational with the broker on any areas, they are working for the lender, and it is in your best interest to work with them as a partner in evaluating the property. Goodwill created with the broker with give you the most influence possible.
Hopefully, by being prepared and working with the Broker as two professionals, you will guide their estimates to be close to your evaluation, giving you the opportunity to make a quality and profitable investment. Influencing the BPO for a short sale may take some work, and research, but the efforts will be well rewarded with a fair and profitable price.