Thinking of buying a home? Not sure where to start? In this video I discuss some ways to help you determine if you are financially ready to take on a.
Whats A BPO
Being a BPO agent for banks gives us a huge advantage over most agents because we learn about many cities and neighborhood and we have a better understanding of what banks will look at when ultimately the home is sold and an Appraiser is sent out for the dreaded appraisal. We know how to head off issues before they become issues with the banks and therefore provide a unique skill set to any potential seller because we truly see the way a bank will look at a home. That can make or break the deal.
A BPO is an evaluation just short of an appraisal which is performed by a licensed appraiser. A bank for financial institution will order an appraisal when deciding to make a loan on a property.
A BPO is a valuation provided by Real Estate Brokers to banks when properties are in the short sale, foreclosure or in a loan restructuring process. A broker will be required to do a much more in depth look at the property values than they would for just pricing a home for sale for a regular sale.
The BPO has a higher standard of criteria for valuation of the home and it must be compared with specific properties and there is a subtraction and addition of value to the subject property when comparing it with 3 sold and 3 active homes. They must be within a half mile radius in suburban neighborhoods and must be within a very close in features to the house which is called the subject house.
Room counts are important as well as the structure and style of the home that is being compared to the other active and sold home listings.
The bank will want to know what the absorption rate is which tells them how long the home will take to sell under current market conditions and the time homes are on the market before selling. In pricing matrix they also look at the age and the functional value of the home.
An agent/broker who works for the banks to provide BPO services will usually be required to take many hours of online training for each different bank.
The Bank will also want to know specifics about the community the home resides in and know both the positive and negatives about the neighborhood and the surrounding community. The bank will require photos of the condition and deferred maintenance and code violations. The bank is also very interested in the estimated costs to repair issues that could affect a quick sale.
There is a price adjustment made for the different amenities.
Same number of bedrooms, Bathrooms, Square Footage
Same style of house, Quality of construction
Terms of sale, View amenity value, Site amenities such as pool or poor location
All of these and more items will be a plus or negative value against the Subject Property.
Sometimes this can change a value by as much as $75,000 so as you can see it's important to have someone work hard to complete a thorough valuation of your home.
The Bank will ultimately order 2 BPO's and an appraisal on the home but will lean heavily upon hte Broker Price Opinions because we are the ones who know when the local market is under pressure or is hot.
Being a BPO agents for banks gives us a huge advantage over most agents because we learn about many areas and we have a better understanding of what banks will look at when it ultimately is sold and an Appraiser is sent out for the dreaded appraisal. We know how to head off issues before they become issues with the banks and therefore provide a unique skill set to any potential seller because we truly see the way a bank will look at a home. That can make or break the deal. A BPO trained agent or Broker will be a great resource on your team when selling.
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