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Short Sales And BPOs

Jeffrey — Tue, 07 Feb 2012 17:33:16 +0000

During the short sale process, the short sale lender will always want to try and decipher what “market value” is. They do this to determine whether they will net more money with a short sale or a foreclosure. They essentailly use this market value number as a basis for all of their calculations.

So, how do they determine what they think market value of the short sale is? They do this through something called a BPO. BPO stands for Broker Pricing Opinion. Essentially, the name says it all. A BPO is a pricing opinion or quasi-appraisal completed by a Realtor (sometimes referred to as a broker) for the lender in hopes of gaining additional information on a short sale property. That pricing opinion might include pictures of the home, pictures of the street, detailed description on the amenities, and various other items of importance. At the end of the day, they all include the “I think the property is worth ______” line.

What’s the issue with these BPOs? Well, frankly, there’s a lot. So much, in fact, I am not going to go into detail in this post. I will leave you with this food for thought though. As a lender using this BPO as a basis for calculation (those calculations influencing decisions that could make or break several to ten’s of thousands of dollars) you think they would act a little smarter about the whole thing. Think about it. A BPO is completed for less than $50 in compensation by a random real estate agent who filled out some application. There is no way to tell if said agent is part time or full time, lives nearby or knows the area, or even viewed the home.

And these BPOs are the basis for most of their yay or nay decisions.

Thanks for reading!

Sincerely,

Jeff Buettner

What motivates the lender?

Jeffrey — Thu, 26 Jan 2012 16:54:19 +0000

There is a flurry of information out there in regard to short sales, foreclosures, and just lenders in general. Before you can truly understand why these lenders do the things they do, you have to understand what motivates them. When you understand what motivates them, it is then, you can provide the correct facts to get your Arizona short sale approved or get a loan modification looked at.

So, what is it you ask? What motivates the banks? That’s right. You guessed it. Money. Money motivates the bank. At the end of the day, for a short sale to get approved or a loan modification to be looked at, all you have to do is show that YOUR OPTION nets the banks even one more penny then OPTION B.

This can be tough in some cases. Why? Because we don’t exactly know what the bank’s expenses are. Yes, we know foreclosure costs them money (maintaining the property, lawyer’s fees, etc…). But how much? We won’t really ever know the exact amount.

So what is our advantage? The bank doesn’t truly know everything about your property, you as a homeowner, or your situation. My rule of thumb is: Tell the bank something they don’t know. Present the numbers and give them a reason to truly look at the file. Maybe it is that your short sale property backs up to a road. Maybe it is the your considering bankruptcy?

These scenarios change the numbers and in some cases, changes the tide.

If you have any Arizona short sale questions, please don’t hesitate to contact us.

Sincerely,

Jeff Buettner

What is an Arm’s Length Transaction? How does it affect short sales in Arizona?

Jeffrey — Wed, 18 Jan 2012 23:37:41 +0000

An Arm’s Length Transaction has to do with the relationships between the parties involved in a particular transaction. More often than not, a short sale lender will require all parties of the short sale to sign an Arm’s Length Addendum.

Embedded below is a very good video about what makes up an Arm’s Length Transaction and how it might affect your Arizona short sale.

Thanks for reading our Arizona short sale blog.

If you have any questions, please don’t hesitate to contact us at the “Contact Us” page.

Jeff Buettner

With a short sale in Arizona, is it better to leave your home?

Jeffrey — Mon, 16 Jan 2012 16:35:23 +0000

With all of the short sales in Arizona that I have handled, one the trickiest questions to answer is about when the homeowner should leave their property. This tends to be a heated debate between short sale experts as there are pros for each side. I will talk about the different perspectives and I suggest you find a balance between each that works best for your family while going through the short sale process.

Pros For Staying In The Home While Doing A Short Sale

An occupied home tends to show and sell better. Buyer’s can visualize themselves in the home. This alone tends to produce higher contracts and more serious buyers.

If you are currently behind on payments, staying in the home while the short sale is negotiated can relieve some of the financial burden.

If the bank find’s out the home is vacant, sometimes they do what is called “winterizing the home”. This might involve boarding up the pool or changing the locks. these are just minor hiccups in the grand scheme of things but might delay the sale.

Pros For Leaving The Home During The Short Sale Process

If you are behind on your mortgage payments, the longer you wait to find a rental the harder it becomes. For this alone, I usually recommend to homeowners to secure a place as quickly as possible.

The amount of time it takes to get an approval on a short sale varies. While normally it is a longer amount of time than expected, every once and awhile an approval can come in sooner than expected. If you are living in the home when an approval is received you usually will have to vacate within 30 days or less. This can be very stressful if you’re not prepared.

Sometimes living in the home while the short sale is being worked is just too stressful for some. The thought of leaving the house you soent so much time to make your home can be difficult.

Like I said in the beginning, this isn’t a one stop answer for everyone. I advise my clients to evaluate the Pros/Cons above and figure out the balance that is best for your family.

If you have any short sale questions, please don’t hesitate to Contact Us.

Thanks for reading.

Sincerely,

Jeff Buettner

What is an Arizona short sale?

Jeffrey — Sun, 15 Jan 2012 23:32:16 +0000

Embedded below is a very useful video on how a short sale works. If you have any questions, please don’t hesitate to ask.

Thanks for continually checking up on short sales in Arizona.

Thanks for reading.

Sincerely,

Jeff Buettner

An Interesting Perspective On Foreclosure / Short Sale

Jeffrey — Thu, 15 Dec 2011 19:16:14 +0000

Brent T White is a local Arizonan and college professor. He make some very valid and interesting points on the economical and moral debate of short sale, foreclosure, and strategic default.

If you haven’t had a chance to read some of his articles, I reccomend you check our our “Brent T White” section http://realestatewizkid.com/short-sale-information/brent-t-white/

Thanks for reading!

Short Sale Investor: Who really calls the shots?

Jeffrey — Thu, 01 Dec 2011 05:38:16 +0000

This is a big misconception among the general population these days in regard to short sales. A short sale, if you don’t already know, is the selling of a home where you owe more than it is worth. To do this, one must get approval from their lien holders/ the company’s that service their mortgage.

Here is where the misconception comes into play. Yes, when doing a short sale, you must get approval from your mortgage company. Unfortunately, most of the time your mortgage company isn’t making the final call on whether to let the short sale go through or not. The majority of the time while, for example, your mortgage might be through Wells Fargo and Wells Fargo’s logo is on all of your bills, but the loan is actually owned by another company. This other company is called the investor.

If you have ever heard of Fannie Mae and Freddie Mac, this is what they do. They are the investors on home mortgages. The investors set the guidelines in place and have final say on all approvals of short sales. This is part of the reason one short sale with XYZ bank might take 1 month and another with the same exact bank can take up to 8 months.

If you have any Arizona Short Sale questions, please don’t hesitate to contact us.

Thanks for reading.

Sincerely,

Jeff Buettner

Arizona Short Sale Help, Where To Get It

Jeffrey — Tue, 08 Nov 2011 17:00:06 +0000

Believe it or not, I read a statistic the other day that said close to 80% of individuals never talk to any kind of professional before or during the time their home goes into foreclosure. This shocked me. Their home is close to arizona foreclosure and they just don’t speak to anyone about it! They don’t get any kind of short sale help, or foreclosure advice, or have a lawyer or accountant review anything.

So, if you’re looking for Arizona Short Sale Help, who should you turn to? There are three major professionals you should turn to.

* Arizona Short Sale Realtor ~ That’s right, the first person you should speak to is a Realtor. They will be able to put a value on your home, see how much you’re underwater, and explain the short sale process to you.

* An Accountant / CPA ~ That’s right. There are some tax ramifications with going through a short sale or foreclosure. you should talk to a CPA to discuss how it will affect you.

* A Real Estate Lawyer ~ Depending on your loan situation, you might want to have a real estate lawyer review your loan documents. Your Arizona Short Sale Realtor will be able to tell you if your loan situation is unique or not.

If you have any additional short sale questions, please don’t hesitate to contact us today.

Thanks.

Jeffrey Buettner

Get Your Short Sale Ducks In A Row

Jeffrey — Tue, 20 Sep 2011 16:38:00 +0000

For those of you who have been through a short sale or have been reading up on them, you know they are difficult. That is the truth. Unfortunately though, the short sale’s worst enemy is the homeowner. That’s right. The homeowner almost always hinders the short sale more than anything else. It’s either they aren’t sure what they need to do to prep their house or can’t find some necessary paperwork. Regardless, all these little hold ups add necessary DOM (days on market) and complicate things.

So, to help everyone out, I have decided to compile a list of things one can do to prep themselves and their home for a short sale.

Short Sale Prep

* Collect Your Tax Returns, Bank Statements, Pay Stubs

* Think About Your Hardship Letter (Reasons Why Your Financial Situation Has Changed)

* Collect Your Mortgage Coupons (Statements From Your Mortgage Company)

House Prep

* Think About If You Need To Keep Any Appliances (The More That Stay The Better)

* Organize The Home (You Should Feel Comfortable With Pictures Being Taken And Put Online)

* Figure Out A Schedule To Allow Showings

Personal Prep

* Your home is going to be sold, you should be ready to vacate in as little as 2 months.

* Start applying for rentals ASAP. If your behind on payments, the longer you wait the harder it is going to

be.

Those are just some things to think about. If you have any questions, please don’t hesitate to call.

Jeffrey Buettner

Why Most Agent’s Won’t Ever Succeed At Short Sales

Jeffrey — Wed, 31 Aug 2011 16:25:37 +0000

After talking to a ton of people day in and day out about short sales, I often get quoted the very low success percentages that the media has thrown together. I have heard people say on average only 40%, 30%, and even 20% of all short sales get approved. How is it that there are some agents getting only 20% approved while others are getting upwards of 80% you ask?

The answer is painfully simple. Determination. Determination is the single most important factor in getting approvals on short sales. Everyone knows the hoops the bank makes you jump through are ridiculous, but that’s not going to change too much. Most have been asked by a lender tell them to call them back in 3-6 weeks…. Really?

The thing that shocks me the most is the agents who listen to these asinine requests. If you truly want to get your file closed, why are you waiting 3 weeks to get an update on your file?

Here are the three rules to getting your deal approved.

* Don’t take no for an answer. (If someone tells you no, you do and talk to someone else.)

* Touch” your file every other day. This means you have to call, fax, email someone from the bank about your file every other day. (It doesn’t matter how long they asked you to wait to call back.)

* If something goes beyond to normal human logic, ESCALATE the file! (They shouldn’t be giving you 3 days to close on a deal that the buyer needs to obtain a loan.)

Following those three simple rules and showing a little determination, you should significantly increase the number of short sales you get approved. If your currently going through a short sale and you feel your agent isn’t doing the above, call me!

Thanks for reading.

Jeff Buettner