Bid Larger Than BPO Equals Everbody Wins?
A few weeks ago, we aired an installment concerning disputing BPO’s. Kevin had an interesting little incident at one of our preferred banks that relates to BPO’s. A file was setup and assigned to a processor at Wells Fargo. They asked for some additional documentation, which were provided. Then, Kevin asked what the BPO value was. What occurred next was a bit out of the ordinary.
The negotiator at Wells Fargo emailed Kevin an actual replica of the BPO. Knowing the BPO now, all of the documents are taken care of and Kevin was expecting approval. However, the negotiator at the bank tells Kevin that the offer isn’t high enough. Here is the remarkable part. The proposal was for $50,500 and the BPO is lower. There are in fact three values on a BPO, but the only one that matters is the “as is” value. The “as is” value of this property is $49,900. The other values on the BPO are the quick sale value of $40,000 and the fully repaired value is $52,200. Yet, with a repaired value, someone will have to put funds into the property.
All of these values are in line with Kevin’s proposal. However, the negotiator still says that the bid needs to be higher. Kevin replied by telling her that the offer is larger than the BPO and we already know what the BPO value is. The negotiator didn’t even recognize that we had the BPO, despite the fact that we sent her the BPO in the email with the bid.
The fact that the bid is not good enough, even though it is greater than the BPO, just makes us mad. This is occuring too often. The media would have you believe that banks want to help home owners keep away from foreclosure. Nonetheless, this undoubtedly shows that negotiators are asking for greater offers without a BPO that justifies the demand for a higher bid.
Why don’t the banks take the offer that meets their guidelines? Accept the bid and move on. Even if it doesn’t meet the guidelines, it is a great deal better than foreclosure. It does not help the property owner and it does not help the lender mitigate loss.
Agents need to be confident in the value of their bid and they need to work hard to figure out the BPO. Banks need to authorize their staff to think. Set up a procedure where agents don’t need to escalate. Agree to the deals and move on.
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