Before you get indignant... BPO better than appraisal?

[Dee Dee]

Do you know of any good written materials on REO? If so, how 'bout posting it under a new topic?

YES! :smilecolros:
I would love to see a good information-filled thread on REO's!

 

[Blue1]

After reading this entire thread I have come to the conclusion that BPO's = HORSEPUCKY!

 

[Bob Ipock]

This thread has shown that real estate and real estate appraisals are very much a LOCAL thing. What may be true for me in my little corner of the world may not be true somewhere else. Local markets vary as do local customs, likes, dislikes, demand, supply...you name it.

All of this tends to show me that it is very important for appraisals be based on the local market and perfomed by someone who is active and knowledgeable in THEIR LOCAL MARKET. Geograhic competency!

Not trying to change the topic.....but is all this LOCAL influence not an indication that methods such as AVM's or other "long distance evaluations" would tend to be unreliable?

 

[Jo Ann Meyer Stratton]

Thomas: If that NAIFA course is being taught by Bill Pena of Fannie Mae, regarding Fannie Mae's procedures for REOs---be in the first row!!! Took his course at the Reno Educational Conference last year--excellant. If anyone is interested in doing REOs for anyone--not just Fannie Mae--try to make it to that seminar.

 

[Mike Garrett RAA]

Took A Fannie Mae seminar from Bill in Denver years ago...yes, he is very good and you will also get a lot of printed stuff too!

 

[David C. Johnson]

<span style='color:darkblue'>Blue1,

"The wise broker will list at the lower price. If it sells at
that price the broker still makes good money..."

[I very much agree with your assessment regarding the/an apparent "BPO rationale/strategy" you have pointed out -- which is the same as found in many listing situations. I sure saw it (when I did residential work) here in Raleigh time and time again when certain agent/brokers were listing for the homeowner -- this was particularly the case when the agent/broker was considered to be a "big name" in real estate (i.e., known for a hell of a lot of sales volume via much self-promoting TV and print advertising). The assumption by the property owner must be that the agent/broker sure must know what they are doing and therefore other higher estimates by other agents/brokers are easily explained away (to the homeowner) by the super expert as being "just plain wacko -- totally out-of-touch" such that the "super agent/broker" gets the listing and the property sells real fast (sometimes the same day or the same hour). After securing the listing, this agent/broker will/may immediately contact a favorite agent/broker friend for early "heads up" (i.e., pre-MLS telephone call) regarding this "real good deal" immediately available for that agent/broker's current home purchaser client list. The property will sell so fast no one knows what's up and the original agent/broker's legacy continues and is enhanced because the quick sell is just "further evidence" that the agent/broker is just damn good (as reported in the advertisements). Also, that broker greatly benefits from "both ends" of the commission as the favor will again be quickly repaid to them real soon -- such that affording the advertising is easily accomplished!]
____________________

Thomas N. Morgan,

"Most of us do work for clients who could care less about
the amount of a hypothetical sale on the effective date.
Prospective sellers and lenders want to know, what can I
get for it? So to answer that question, we are talking about
future value, not present value.

That is the basic difference between a true market value
appraisal and a BPO. They do not have the same objective."

[Very good point in my opinion.]

_____________________

Ann O'Rourke, MAI, SRA (annor),

"I have turned in non-lender appraisals with one very old
sale and two recent expireds. But then... I'm the curious
appraiser!! "

[What does USPAP have to say about this? -- not using closed sales at all but (well except for the one old one) but rather using recent expired listings (assuming I have interpreted your post correctly)?]

_____________________

dcj</span>

 

[Terrel L. Shields]

annor said

appraisers must prove their opinion, using sales, expireds, pendings, etc. Unfortunately, too many appraisers rely exclusively on sales, which are the past. I always look at active and pending listings, expireds, and any previous sales or listings of the subject, no matter how long ago.

Pretty thoughtful for a newbie until I realized who you were! Ann, I agree entirely. Garden variety cookie cutter homes maybe not such a big deal, but any unique property has a two fold problem. What is out there to compete with it and what happens when Days on Market jumps from 90 to 300 in 6 months...means not many turned, but your sales still remain "in the past", your listings and expireds are saying slower market thus (likely) lowering prices.

 

[Mike Simpson]

In my neck of the woods Realtors list the home low on REO's nearly everytime. We've one Broker who routinely lists low on REO's while pushing for higher values on investment properties, or government financed transactions.

This same Broker recently argued w/me over my estimate, and opinion regarding repairs. While they were in the middle of starting a mess, a full price offer came in within the week--exactly at what I'd appraised the home for & requesting the same repairs I'd recommended.

This stuff is a no brainer--wonder why the REO Co's aren't asking themselves how many thousands they're giving away?

-Mike

 

[Larry Lyke]

Part of the Real Estate Broker's obligation to his client is to obtain the best possible price for the property under given reasonable marketplace vagaries -- i.e., taking into consider the marketplace.

Selling property too cheap is a great way to get your thingie in a wringer.

 

[Mary Fee]

Larry-

I agree that part of a Real Estate Broker's obligation is to obtain the best possible price, however, I firmly believe that most Realtors are in this business for themselves (please note that I said most, not all).

I've been in this business for over 15 years and I can count on one hand the number of Realtors that I think have the clients best interest at hand. Most are more worried about their commission; if a sale price of a few thousand less than market value gets them their commision quicker, then they go for it-remember their co-op is only about $25 to $40 per thousand, its the seller that relied on their expertise that loses the extra thousands of dollars.

In my neck of the woods, the Realtors recommend appraisers to the REO companies. I am not so naive to think that there is no back scratching going on.

Mary