Читать книгу Magic BPO Success Secrets - Cory Ph.D Boatright - Страница 7

It is imperative that you learn about the BPO (Broker Price Opinion). The Broker Price Opinion or BPO is required by the bank for the Short Sale Package that you submit to them. The BPO is generally outsourced to an external company, with an already established relationship with the bank that will manage the BPO for the bank from beginning to end. The bank will usually have a long list of BPO approved vendors they can work with.

The lender is extremely reliant upon a BPO because bank's work in ratios. Say if a homeowner owes the bank 250,000, but the property worth to the bank is only 200,000. When considering a short sale, the bank will generally reduce the rate of the loan to a percentage of the current property value, indicated by the BPO. In other words, whatever the BPO says is what the bank is going to go off of for the value of the property.

Banks work on formulas that involve specific ratios to determine if a short sale offer will be accepted. The bank will negotiate a loan based on a ratio, which varies from bank to bank, but is generally somewhere between 82-95% of the value determined by the BPO. If the value is set at $200,000, and the bank uses a ratio of 82%, then they will most likely accept an offer of $164,000 or more. The investor's role is to influence the BPO to come in at a lower value. Let’s discuss how you as the investor are going to be able to best position yourself to positively and ethically influence the BPO value.

The bank is pretty lazy when it comes to ordering BPO’s. In fact, about half of the time the bank will hire a BPO agent to go out and give a quick CMA of the property, but occasionally they will hire an appraiser to give a full blown appraisal. The key is to communicate with the BPO agent and convince them to turn CMA in at a lower value. Negotiation is imperative to short sales, but if the BPO comes in high then your negotiation skills won't mean much. Influencing the BPO is essential. How you prepare for the meeting and communicate to the appraiser is crucial. If you understand this next part you will be ahead of the BPO “game”.

You can’t forget that you are an investor looking to purchase a property for a deeply reduced selling price. You must be able to flip the property for a profit, and to do that, you need the BPO to come in LOW. If the value is set at $200,000, and the bank is using a 82% ratio, then your offer of $140,000 isn't going to get you anywhere. A lower rate is crucial to you as an investor. However, if they turned in a value of $150,000, then you could be looking at having them accept an offer of only $123,000 as full payment. Now that is a short sale you want to buy and hold or flip for a fast profit! You are beginning to understand that is really doesn’t matter what the value of the house is worth as much as it matters how much the BANK THINKS the property is worth, Kapee’sh?

Short sales can take a long time to get a bank to approve them. In fact, the short sale can take three to four months to work out and there are often no clues as to whether or not you will get your offer accepted by them. If you skip a step, are unable to communicate with the BPO by saying or doing the wrong thing, then all your hard work will be for naught. It won't matter how prepared you were or how many hours you put in. Now let’s discuss some of the “nuts and bolts” on figuring out the lenders BPO value on file.