BPO and Appraisal

[Sharon Dossett]

Has anyone had a problem when client orders a BPO and an appraisal and wants the appraiser to reconsider value?

I appraised an REO and the client had already received a BPO with a value 30k less than my appraisal and they are requesting that we meet in the middle on the value. WT@!!!
The real estate company sends back message to client that any listing amount over 35k it will sit on market for 90+ days. Their comps are not comparable.

In my opinion the real estate company wants a fast sell, or knows someone who wants to buy it, put a little work into it and make a profit of 30 to 40k. Has anyone seen any evidence in the market of this situation?

 

[Michigan CG]

....In my opinion the real estate company wants a fast sell, or knows someone who wants to buy it, put a little work into it and make a profit of 30 to 40k. Has anyone seen any evidence in the market of this situation?

Every week.

 

[residentialguy]

Has anyone had a problem when client orders a BPO and an appraisal and wants the appraiser to reconsider value?

I appraised an REO and the client had already received a BPO with a value 30k less than my appraisal and they are requesting that we meet in the middle on the value. WT@!!!
The real estate company sends back message to client that any listing amount over 35k it will sit on market for 90+ days. Their comps are not comparable.

In my opinion the real estate company wants a fast sell, or knows someone who wants to buy it, put a little work into it and make a profit of 30 to 40k. Has anyone seen any evidence in the market of this situation?

Check with the lender. Could be a mis-understanding in what value they were looking for. They may have wanted you to give the most probable price that the bank could sell the property for as a REO sale, and you have them MV as stated on the 1004, which is the most probable price the property would get if there was no high motivation or undue stimulus to sell...hence the value variance due to the condition of the sale, (which is probably typical of the price variance of traditional seller vs REO that is seen between the two types of sales in your market).

 

[Jerry Bone Jr]

Check with the lender. Could be a mis-understanding in what value they were looking for. They may have wanted you to give the most probable price that the bank could sell the property for as a REO sale, and you have them MV as stated on the 1004, which is the most probable price the property would get if there was no high motivation or undue stimulus to sell...hence the value variance due to the condition of the sale, (which is probably typical of the price variance of traditional seller vs REO that is seen between the two types of sales in your market).

Good answer.

 

[J Grant]

They can't ask you to "meet in the middle" of your value and a BPO. If you did an REO apprasial, unless instructed otherwise, it is OMV on the report, and then on the REO addendum, they ask for a reduced marketing time value , which often is lower...did you provide that?

REs Guy, sorry but you are wrong. Unless the client specifically instructed the appraiser that they wanted a different value, they asked for MV, and that is what it says on the form. IF the appraiser was appraising to a quick sale value, they'd have to strike all the MV language from the form and make a disclosure etc. In additin to OMV on sales comparison page, the REO addendum asks for a reduced marketing time value which usually means a reduced price.

The OP may or may not have used the best comps and I have no idea is his value is too high or just right. I have no idea if the BPO is too low or used good comps. The OP if he believes in his OMV should stick to it, and address why he does not think the comps in the BPO are the best competition to subject, and why the BPO OMV is not credible and supported.

If the OP thinks the BPO used better comps than he did, then that is a valid reason to reconsider his value. Most clients are asking appraisers to include at least one REO sale now in reports, was that done?

 

[residentialguy]

REs Guy, sorry but you are wrong. Unless the client specifically instructed the appraiser that they wanted a different value, they asked for MV, and that is what it says on the form.

No, I'm not wrong. How could a suggestion that the lender wanted liquidation value but incorrectly requested it on the 1004, be wrong???

I suggested that OP verifies the SOW to make sure they're on the same page with type of value. How's that wrong?

 

[J Grant]

No, I'm not wrong. How could a suggestion that the lender wanted liquidation value but incorrectly requested it on the 1004, be wrong???

If the lender wanted liquidation value, they have to give instructions clearly that is what they want, and it has to be disclosed on the report, that the appraiser is giving an opinion of liquidation value. From what I understand of the assignment, this was not the case.

A lender does not "suggest" that they want liquidation value and "incorrectly" request it on a 1004 form.

I suggested that OP verifies the SOW to make sure they're on the same page with type of value. How's that wrong?

I am not sure what you mean by this...I suppose you mean the OP should verify with the lender what kind of value they are looking for. IF they tell the OP they want a value other than market value, then the OP better disclose that on the report. From what I understand of this post, the lender asked for market value of an REO property, usually that means a 1004 with an REO addendum, and then a BPO was done which came in lower, and the client asked the appraiser if they could change their value to "meet in the middle" with the BPO value...this request of the client is not appropriate, the client is now directing the value and telling the appraiser what value they want, which as you know we are not supposed to appraise to a predtermined value.

IF the OP reads the BPO and finds there were better comps used and wants to put new comps in and make a new value, that should be up to the appraiser, and not at the direction of the client.

I have often been handed BPO's to comment on, some are lower than my values and some higher. So what, that is their opinion of value, I made mine. I rarely if ever found the BPO value that differed substantially from mine was well supported, but that is my experience with them.

 

[AnonApprsr]

the most probable price the property would get if there was no high motivation or undue stimulus to sell

Which can be an REO sale.

 

[residentialguy]

the most probable price the property would get if there was no high motivation or undue stimulus to sell

Which can be an REO sale.

 

[residentialguy]

[/b]

I am not sure what you mean by this...I suppose you mean the OP should verify with the lender what kind of value they are looking for. IF they tell the OP they want a value other than market value, then the OP better disclose that on the report. From what I understand of this post, the lender asked for market value of an REO property, usually that means a 1004 with an REO addendum, and then a BPO was done which came in lower, and the client asked the appraiser if they could change their value to "meet in the middle" with the BPO value...this request of the client is not appropriate, the client is now directing the value and telling the appraiser what value they want, which as you know we are not supposed to appraise to a predtermined value.

Just verify that is the case...or at least ask if the BPO was based upon REO sales so you can shed some light to the problem of the BPO to the client.