BPO Problems With Banks Will Persist

Posted by on Jul 28, 2010 in Foreclosures | Comments Off

Short Sale Power Hour

Kevin and Fred, the leaders of Group 46:10, Arizona’s leading short sale team, are chatting today about pricing and listing. Before you shut the video off because you already understand how to list and price, hear them out. Depending on your market, you may not be experiencing the same stuff as Kevin and Fred are in Mesa. As lots of of you know, the deadline for taking advantage of the tax credit has passed. What we are seeing right now in the market is a slight bit less enthusiasm from house buyers and house owners. The inventory is beginning to increase and that generally leads to prices going down. When you observe that trend, you tend to have more disagreements with banks concerning the value of homes.

There are a lot of of the similar obstacles in 2010 that we had in 2008. Banks love to look at sold comparisons. Yet, if you want to deal with the variability in the market you need to compare values with active and pending listings. Price yourself ahead of the market if you want to sell the residence.

At the moment, the BPO’s are coming back higher than what they ought to be in Kevin and Fred’s opinions. There have been discussions with Chase bank where they have raised the BPO price because they disagree with the BPO agent’s number.

It is important to understand that there will be more BPO problems in 2010. Other parts of the country may not go through these problems if your market has only depreciated 10-15%. However, in the Phoenix real estate market, with depreciation levels approaching 60-70% in some cases, there will be BPO issues.

The lender will perhaps make some mistakes and foreclose on some homes. Don’t be surprised if it takes them a while to rectify their own practices through this transformation in the market.

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