Where are you actually located. I'm in Phoenix and I'm doing 55% on UGLY houses so I can flip at 65% to 70%. They usually negotiate but I give them a lot of back up in my packet and put up the biggest fight possible. Sometimes I get to 65% which is fine. The lenders I've been working with recently have asked me to get the BPO ordered which works out fine because I have a bigger influence and direct contact with the BPO.
Thanks Barbara--I'm out of Southern California so it's obviously tougher here. Just trying to work the west coast mostly so your info helps
Mr. Keegan,
Short Sales are not being given away as the previous person leads you to believe. Banks are not selling homes at 55% off of BPO unless a buyer buys tapes or portfolios from the banks (then we're talking large real estate deals with NDNCs and attorneys to match). The bank is going to let it go to sale and will start the bid at auction at 90% of (BPO1+BPO2)/2. Call a lender and ask to speak to their foreclosure technician=mediator between lender and appointed attorney/trustee. Then ask them how do they calculate the opening bid at the auction.
Banks are not going to let the properties go for less than they feel it is worth minus acceptable losses (within reason=subject being less than the foreclosure costs, carrying costs, closing costs, REA costs, costs, costs, costs, etc.) Let just say according to the information above they should just be giving the keys away with the REO properties. Call the REO departments.
Main thing about short sales you need to know is that you need to try to throw as many up on the wall as possible. Not all will close due to various reason but that does not mean you should not trek on. Short Sale or Short Pay Offs, as referred to by lenders, are a lot of work and you may want to do a few yourself but as soon as you really pick it up it is time for you to get a processor on your side. Really, the job is for a phone jockey while a sales man like yourself finds a buyer. Companies such as our and other default/short sale servicing organizations work on a small flat rate fee charged to the seller (or anyone looking for account management services). Just like a Transaction Coordinator(TC) but handles your Short Pay Offs.
Either way, best of luck, and post away those questions as they come up. A plethora of great info can be found on line and in blogs, threads and other internet forms of media.
This is a tricky question. I think you need to look at it from the standpoint of market value and not BPO. If you are really good at influencing the BPO, obviously, the values percentages change....Before you offer on the deal, you need to come up with your maximum allowable offer. When you get the BPO and it is done favorably, your offer may be 90%. If the BPO isn't favorable your offer may be 60%. It is a case by case analysis.
Agreed that each case has many factors and those factors each play a role in the final outcome. Issue is that you can only influence BPO if they allow you to. If not BPO is god's word to them. FMV=BPO for the bank. That is why they do them (to prove to the investor what the figures are through a reliable source). Doesn't mean that is close to reality but that is the entity that will be accepting your offer. They need to be on the same page as the offer or it's not getting through. BPOs mentioned above were in regards to what most times the bank will open up the bidding at the auction. After that it is about feasible costs the may need to pay along the way. How much you can save them? Discounting damages? Etc. They want you to save them money and time. They may give homes at large discounts of what is owed but not off of what it's worth. Just makes sense. I'm also just saying that I used to do this for the bank and now work for the homeowners.
[b]
Bottom line:[/b] BPO should not be the buyers gauge for buying. They need to run their own comparables and figure out what offer brings them a maximized return.