HELP: Short sale/BPO value dispute question

[hmarteaga]

I have a short sale in which the BPO is coming in way high - $455,000 (big surprise). The lender's appraisal review department is adamant about that price after several reviews (supposedly). I have comp'd this property over and over and cannot justify anything over ~$390,0000 in it's current condition (repairs and required remodeling).

Every buyer and their agent has agreed with me. Nobody has offered more than $380,000 for the past 2 months. When the market does not agree nor is willing to pay the supposed appraised value, there is a term or wording for this?

I have disputed this BPO several times and it has gotten me nowhere with the same response from the lender "Our appraisal review dept confirms the $455,000 price. Please send out a counter in that amount". I did just that and the buyer kindly told us to pound sand.

I have asked the lender to order an appraisal to validate my position as well as theirs. They stated there was one done already and I caught them in a lie as nobody but agents have accessed the property (supra key log). I'm going to assume this is a stratagem to delegate the expense of an appraisal to the buyers, sellers and agents. Anyone have experience with this?

Any comments or suggestions greatly appreciated.

Sincerely,

Real Estate Agent trying to make a living

 

[CANative]

I caught them in a lie as nobody but agents have accessed the property

Maybe it was a drive by.

I'd probably believe an independent professional appraiser before I'd believe a real estate agent who's motivated to sell the property. Nothing personal.

 

[Smokey Bear]

Have they given you a copy of the BPO AND appraisal? I think they're making it up as they go along..

 

[GCJim]

THanks for your question.

I'm not sure that there is much that you CAN do if you have a lender that won't sell for less than a certain price. Frustrating, I know.
Some ideas for ya.....

1.) As you might imagine, from an appraiser's point of view, BPO's are considered to be 'questionable' (generally speaking, and I'm being polite here.....) Many are known to be inaccurate and biased for a variety of reasons, but mostly because real estate agents expect something in return, like a valuable listing. There is much controversy raging about the quality and value of BPO's. You've probably heard.

2.) If you and your potential buyer feel that strongly, is it worth hiring a competent, certified appraiser (by either one or both of you) for an unbiased opinion of value to verify your opinions? An appraisal CAN be an effective bargaining tool. You can continue to lobby the bank with a written offer AND an appraisal to back up the offer. An appraiser may be willing to offer you a two-tier pricing scheme.......x amount (say, 50%) for initial research, and an additional x amount (50%) for a full report, if the research appears to prove you are correct.

3.) If your market is in decline, show them some stats to further back up your stance. Other than this, all you can likely do is continue to contact the lender periodically with your version of the facts of the marketplace until they, hopefully, relent.

Just some thoughts. Good luck with this! I hope it works out for you.

 

[Mile High Trout]

An appraisal can be ordered independently, and although not required to be given consideration by the seller, still can be given consideration depending on how they feel about it.

To review any statement of value, on must first recreate the research and search methods. It sounds like the methods of hmarteaga (thread poster), are different than the methods of the BPO developer.

Argue the case with the principal of substitution.

Keep your buyer informed, and let them know that after additional marketing periods, the seller might be willing to reconsider. That or they could spend on an uncertain appraisal, and potentially have an additional bargaining tool.

There are no certainties in real estate. Also the presence of distressed on non distressed valuations in the market has thrown many for a loop. If your position is that their opinion on price is too high is valid, well I guess after some time has passed, they may be more willing to take your position into more serious consideration.

It's difficult to blame a seller for engaging in flexible pricing to try and get the most out of a property. In fact, that's how the most savvy sellers can operate. However, a well informed seller will take into account new information, and will be willing to be flexible on pricing, after time has passed and no other offers are present.

There is a lot of kickback on this issue from many sides. If this was already in a deal state, and the seller said yes, you could have a similar problem with the appraisal. The lender would say to the appraiser: "Your value opinion is too low, consider these comps", which would be the comps off of the aggressive BPO.

Whether you're an agent or an appraiser, it's still lender pressure. Recognize it for what it is. Some lenders and sellers are less than flexible, and when deals go down, they never blame themselves. If they are the seller, they can behave however they want to, even if that means going down in flames with the ship because they insisted on one point of evidence towards unrealistic price expectations, even though every other source said otherwise.

 

[NorthTexValuation]

Nobody has offered more than $380,000 for the past 2 months.

60 DOM is a rather short exposure time in most markets. Wait until 180 DOM and I will bet the lender is more willing to take your offer seriously.