Archive for Realtor

C G Pop asked:

I wonder if there is stimulus money for the lenders? Are reputable local small banks getting speedier responding to short sale offers now we are at the end of the year? How long would you guess I would need to wait for an answer for a reasonable answer. The seller is going to Afghanistan and is in the military.
The seller accepted my offer immediately. Seller has hired a short sale specialist and my realtor has many years in the business. There is only one bank.

He has completely moved from this house.

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m asked:

Does anyone know how long take to Citibank to process a short sale offer? My realtor say usually between 6 to 8 weeks and that depend with bank in processing the offer. But she also said she had not previous experience with this specific bank. If anyone does, your information will be appreciated.
Thanks.

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flydoctor asked:

My husband and I just put in an offer for a house that is a short sale. The seller approved, and today the realtor sent the paperwork to Countrywide for them to approve it. I heard it can take months for them to respond, but the house already has an appraisal on file at Countrywide and I was told that Countrywide just recently got a short sale “department” to speed up the process. Anyone have any idea or estimate of how long we will be waiting for a response?

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Cory Boatright
asked:

It is good to understand the general perspective of the agent conducting a BPO. Did you know the BPO Agent usually only makes $40-50 for each BPO the lender orders? Consider that for a moment. The BPO Agent has to drive out to property, spend 30 minutes or more inspecting it, take 10-20 pictures, drive back to their office (which many work from home), spend ANOTHER two-three hours putting together all the data they collected and uploading the pictures and information to company the lender used to order the BPO. All of that work for $40-50 buckos. The reality is the BPO Agents do not make any money if they have to spend A LOT OF TIME with one BPO. They have to burn thru as many BPO’s as possible to at least make a few hundred bucks every two weeks. This doesn’t mean they do not do a good job conducting one. In my opinion they are simply not motivated enough to spend the required time to produce an accurate value on the property every time. Hence, here is where investors can make more profit.

Many banks typically are not looking at just one property when they consider a short sale transaction. They are considering the entire portfolio and YOUR property may be .25% of a 50-100 million dollar portfolio. Banks for the most part do not make time or spend enough money to really care if they lose MORE on ONE house than what it is worth. They spend as little as possible to have some type of paper trail to present to their superiors and Senior Lender/Credit Officers, so they can sign off for compliance with standard operating procedures for the short sale approval. The incredible part of their story is this. Even though banks spend as little as possible to obtain a value on a property and short sale it when a Loss Mitigator writes a letter of recommendation. They still SAVE MORE MONEY by accepting short sales and not let their properties go into foreclosure and complete the auction process. Can you believe that? With all the mistakes and lack of due diligence on THEIR part…they STILL SAVE MONEY! That is astounding to me, but hey… it still makes great opportunities to profit in short sales. …so carry on with the bad habits banks….carry on.

Here are the basic factors that are considered in a BPO for the lender.

• What is the condition of the property?
• What have similar properties in the area sold for on the MLS?
• What does the home need to be sold in 90 days or less?

Serve One Another Better,

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Colin Andrews Egbert
asked:

Determining the short sale appraisal of property you have under contract is one of the most important aspects of the short sale business. Without knowing the short sale appraisal value of the property you are interested in, it’s impossible to formulate your offer to the short sale lender without knowing the home appraisal value of the property you are interested in. Knowing the appraisal value of the property is just as important to the loss mitigator at the bank.

So he has a baseline price for negotiation, the loss mitigator must establish an appraised value for the short sale property. The appraised value of the property determines how and for what price we negotiate the short sale price of the property.

An Example of Finding the Home’s Value

You may outsource the short sale appraisal needs of your short sale business to another company or a certified FHA appraiser.

The real estate investor will email the FHA appraiser, the address and owner’s name when a deal comes in and about 24 to 48 hours later the appraiser will send back a limited desktop appraisal with three comparison prices. These comparison prices are on other similar properties that have sold in the area and the market value that the appraiser has determined for the property. These appraisals may also include some additional information and a map.

You’ll get an idea of the market value of the property in comparison with other distressed properties in the area using this method. Don’t look for sales of well maintained properties when looking for compositions. Instead look for comparisons of other properties in foreclosure, REO properties, or corporate-owned properties.

Comparing Property Prices

Looking at the properties in the same area of the short sale property is the best way to determine the short sale appraisal value of a property. In the short sale business this is called using property comparisons (comps).

It’s easy to get the comps for your area with the following four services;

• Free comps services on the Internet
• Subscription programs (one is Haines, a subscription service on disc)
• Network with a realtor who can pull comps for you
• Multiple Listing Service (MLS) if you have access

We don’t recommend that you use the free market comparison services found on the Internet, since they are worth as much as you pay for them. Spending some money to get comps for your short sale business is a good thing. Paying for the comps means that someone is actually doing research behind the website or program.

Price Comparisons do Cost!

Short sale businesses pay for their comps because they want accurate, realistic market value comparisons. Remember to allocate funds to pay a company or a certified FHA appraiser for that home appraisal when you are figuring the budget for your short sale business.

It’s worth the cost to pay for a home appraisal so you can have accurate comps from third person parties or neutral parties. You’ll feel confident in presenting their appraisals as objective evidence to the bank in your short sale package.

Adding the Repair Costs

Just as important as comps in the short sale business is the physical condition of the property. You’ll want to make notes of what’s wrong, take photos, and get construction estimates for the cost of repairs, if there are any repairs to be made on the short sale property.

When you do your cost estimates remember that the short sale deal may include getting the bank to make the repairs, not you. Be sure to get cost estimates from a general contractor the bank would typically hire.

Hiring a certified home inspector is the best way to get cost estimates for your home appraisal. It’s easy to use the yellow pages to look one up.

You can also use an organization called the National Association of Home Inspectors (NAHI) to find a home inspector. This organization has high standards and is a good way of making sure you get a thorough inspection.

It takes about two and a half to three hours to complete the typical home inspection. This is because the inspector gets up on the roof, checks the crawlspace and goes over the home with a fine-toothed comb. On completion of the home inspection the inspector hands over a report that can be 20 pages with detailed information about the property defects. Home inspectors may also takes photos and provide detailed cost estimates.

A great way to calculate the short sale appraisal value for your property is by paying for a home inspector to get cost estimates.

An Example of Getting Cost Estimates

A member of NAHI is Dan Shields, a typical home inspector. He does all of the short sale appraisal evaluations and repair estimates for many investors.

He likes to start an inspection from the outside of the property to get a look at the house over all. He checks the;

• roofing,
• gutters,
• siding,
• windows,
• porches, and
• columns,

all to make sure they’re properly installed and flashed.

He then enters the home to document built-in amenities, appliances, and flooring. He next goes to the mechanical room and checks the heating/cooling package and plumbing. Lastly, he checks the attic and looks at the insulation factor of the property.

How the Broker’s Price Opinion figures in?

The loss mitigator will want to determine their own estimate of property value when you complete your short sale appraisal and submit the short sale package. In the short sale business, you’ll often find that two sides must each do their own evaluations before meeting in the middle.

The loss mitigator gets their property value by way of a broker’s price opinion (BPO) or market value. Sometimes this appraisal is done by a realtor or an appraiser.

It’s important that you do your best to influence the final BPO that the appraiser turns in on the property. Do this first by being the contact person that the appraiser goes through to get into that property. It’s very important that you meet the appraiser at the property. So you can convince him or her that your home appraisal value is close to the same as the BPO value.

Let the appraiser know that the property is in foreclosure and that you’ve been working with the seller to try to do a short sale when he or she drops by for the walk through.

This meeting is first impression time so be yourself but also stay calm and non-threatening. Let the appraiser do his or her job and talk shop for a few minutes before you start shoving your material on him.

The whole BPO process is much quicker than a traditional home inspection and it will probably take less than 15 minutes. So the appraiser is likely to miss a lot unless you point it out to him or her.

What Happens During the BPO?

To help yourself and your short sale business is sure to take three things to the BPO;

• a copy of the Real Estate Purchase Contract with your offer amount,
• your market value comparisons and
• a copy of your home inspector’s report.

Offer the material to the appraiser in a conversational tone. A professional appraiser will usually always want a copy of your inspector’s report. An appraiser will always take the property inspection report because it’s a good, neutral indication of property damage. If it’s a realtor doing the appraisal you can never tell what they’re going to take. Just ask and see what he or she will take from you.

Let the appraiser know that your Purchase Contract has been at least preliminarily accepted by the bank and that’s why he is appraising the market value. You’d be surprised how often the bank’s appraiser doesn’t even realize the property is in foreclosure.

Also try to share comps with the home appraiser. Usually appraisers have pulled comps before they go out to the property, so you may be able to share comps to get an idea of what their BPO will end up being. This knowledge definitely helps you in the negotiation process.

Chances are high that the bank’s BPO will come in close to your short sale appraisal value once you get these three documents into the hands of the bank’s home appraiser. When you get a good short sale appraisal value and cost estimates on that short sale property your short sale business will get off to a great start.

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