RealTown's RealTalk

RE: BPOs being kicked back.

I've probalby done about 1000 BPOs in the last two years. About 95% of them pass through QC without any revision, about half of those that are sent back for revision are approved with further explanation. Most of the companies that I deal with prefer a more aggressive price than one that is to high. Properties in my area are selling. Most of my REO's in the entry level price range are selling with mulitple offers. Some with as many as 15-20 offers, selling sometimes up to 20% more over list.

Yes, Neal, sounds like we do the same amt of BPOs, and I was hoping to hear from you on this.. Since Jan 1st, I've done 78 orders, of those, 11 were kicked back for value being too high.
On 3 of the 11, I refused to budge, I knew my numbers were right. On the other 7, I found other comps, and made minimal adjustments.

Like you said, many of these REO comps end up with multiple offers, and often do sell over list-price. That is my point exactly, these houses were underpriced and sold too cheaply, and should be given limited credibility. If they were listed at $70K, and had multiple offers, a feeding frenzy so-to-speak, then common sense tells me that they were underpriced, and could have been listed for $80K and still gotten a quick sale.
Here in Houston, $100K is like a magic number.... almost anything under $100K, especially if recent construction, will sell very quickly.

When I know "what the market will bear", why do they give so much credence to the comps? All of my explanations seem to fall on deaf ears. They keep referring back to the comps. Even when I explain ad nauseum why the comps are "suspect".
Other factors kick in: when all comps sold in less than14 days maybe for more than list, location within the nghbrhd, appliances still there or not, curb appeal, front-porch or not, landscaping, etc., not to mention my vast knowledge of Houston real estate.
I know the banks are just trying to unload, but leaving money on the table is pretty stupid.

Lindy in Houston

Neal wrote:
I've probalby done about 1000 BPOs in the last two years. About 95% of them pass through QC without any revision, about half of those that are sent back for revision are approved with further explanation. Most of the companies that I deal with prefer a more aggressive price than one that is to high. Properties in my area are selling. Most of my REO's in the entry level price range are selling with mulitple offers. Some with as many as 15-20 offers, selling sometimes up to 20% more over list.

Jeff, your BPO situation is awful... beyond reprehensible. If she did an Interior, and you have a waterview property, she should have had dozens of photos. If the comps weren't waterview, adjustments should have been plenty large. Please do not judge all BPO agents by this one person.

It's just like listings in MLS, there are always some lousy agents... so often I see a 3700sqft house with only 6 photos, only a few inside, and none of kitchen... but I don't judge all agents by those lazy ones.

Your BPO agent did a poor job... skimpy photos, ancient comps, no complete walk-thru, this is truly astounding.... the ceilings might have been caved-in someplace, how would she know?

The fact that you successfully challenged her BPO, is laudable.... but what a shame you had to go thru all that.

OTOH, I'm reminded of one BPO order I did recently: an awesome, gorgeous, huge, white stucco, on lakefront cul-de-sac, in a country club nghbrhd. I came in higher than the comps, because the comps were not lakefront, and were not fancy arched Taj Mahal-looking.... some comps only had formica. I don't know if your situation was similar in any way, but when a property is semi-unique, with limited turnover, it is a tough call... whether to use only lakefront properties which may be older (6-12mo) comps, or make adjustments on non lakefronts, it is tricky. I have no idea if it was a ShortSale or not, and I did not do an "Interior" (which is often a ShortSale indicator). I did have info regarding granite counters, etc., from previous MLS listing. But facts are facts... it would sell for more than all the ordinary-looking comps.

I'm really disgusted at the procedure (or lack thereof) you say she went thru... hopefully she will not get many orders.

Lindy in Houston

Lindy from Houston asks an importatn question regarding "recent BPOs"

Doesn't anybody in this room get it? The reason for the "Kick-Back" on over priced BPOs is becuase the lenders and their loss mitigators have already received their PAYOFF through the Bail-Out. The "toxic" paper you keep hearing about is all the Over loaned Worthless Properties out there. What people are not understanding is that the Investors for the loans were "paid" back through the Bail-out. So now the problem is getting rid of all those properties to the highest bidder as soon as possible! It's not about market value any longer it's about LIQUIDATION as soon as possible. The Lenders have to clear their books (toxic paper) in order to secure new loans for people who are selling these properties. Who are the people selling these properties, the investors who are paying a nickle on the dollar. I'm seeing property that sold in 2005 for $295,000 going for the unheard of rock bottom price of $79k asking price! Look at the surge in sales for the past 2 weeks. Sales volume has doubled because cash buyers are buying up all the REOs and any Short Sales that are available (Toxic Paper). This is what we can look forward too for the next couple of years.
That is why BPOs are being KICKRED BACK! Wake up and smell the Socialization of our Financial Markets! It's happening and we Realtors have to make sales if we are going to survive! The real winners are the Federal Reserved, FDIC and the US Treasury. Do you really think the end result will ever trickle down to us end users? Never has in the past why in the future. We are gambling with out children's children's future.