Getting the BPO to Come In Low...

I have seen numerous questions on how to get the BPO to come in lower than FMV.  There really is no one way, but here are some things that can help.

Always have one of your team meet with the BPO agent.  Strike up a conversation and see if you can befriend them.  The agent's job is to bring in a BPO to the lender, so you have to try and get them on your side.  You should never do anything unethical, but if the agent decides they like you, the price might shift in your favor.

Conversely, if it appears they do not want to talk, then leave them alone.  Just as becoming friends with them can tilt the BPO in your favor, irritating them can do the opposite.

Either way, the property should not be your conversation starter.  Start your conversation with a question.  Find out what interests the BPO agent.  The more you know about the agent, the easier it is to make them feel comfortable with you and see you as a person, not just a potential buyer.

You will point out any problems with the house, but this particular property is not the end game with the BPO agent.  Remember that you very well might see this agent on the next property.  We just had a BPO done on a property by an agent that had done the BPO on a property we bought at the end of December.  He remembered us because of our approach at the first BPO.

You should have done your homework before the BPO, so that when you get there, you have repair estimates, COMP's, a sexual predator's list, crime rate studies, etc that you can provide the agent.  Any little thing that you can provide could be the trigger that gets the agent to lower the BPO. If there has been any crimes on the proeprty recently, then make sure you get the police report and provide that. 

One of our properties has been broken into while the homeowner was there twice.  It is not in a bad neighborhood, but there is one bad family there.  The two brothers were both caught and are sentenced to jail (third strike in Florida), so neither will be able tocause this homeowner any more trouble.  But, just the fact that this happened twice should result in a lower BPO.  When the BPO is done on this property, we will provide the police reports and a letter from the state attorney general, which stated that the homeowner was no longer allowed to stay in the property because the two who broke in lived just two doors down and were out on bail.

Once you have walked the property with the agent and pointed out all of the problems with the property, this is the time to let the realtor know you have run the comp's for him/her.  All of your research should be in a file you can hand over to the agent, so just give them the file.  It would be in your benefit to explain that there are other documents in the file than just the COMPs.

Many will state you only need to provide three comps, but in our situation, we have found that if you can provide more, provide as many as you can at the price range you want the BPO to come in at.  Some areas do not lend themselves to multiple low COMPs, but others do.  Do not provide the higher comps, but if you can find six or more that will help drive the BPO lower, thenprovide them all, especially if the property in question is actually in better shape than the majority on the neighborhood.

Remember when pulling COMPs that they should be within one mile of the property, should be built within +-10 years of the property, should be +- 200 sq ft of the property and have comparable bed/bath.  If the agent looks at your COMPs and finds that they do not meet the criteria, you will most likely have burned a bridge with that agent.

Now, these are some things we have found that work, but they are definitely not all of the ways to get the BPO lower.  I welcome comments on other way to get the BPO to come in lower.