The BPO (Broker's Price Opinion) is the most important part of the short sale packages. Most banks will not go lower than 80% of the BPO. A real estate broker is paid $50 to go out and do their Price Opinion on the house. However, many real estate brokers are not professional appraisers and make the same common mistakes.
1) They often do not know how to do construction cost estimates on a home. You need to have estimates with you probably from a licensed contractor.
2) They often use the wrong comps. A rambler should only have rambler comps. They will often mix split-level, rambers and two story buildings.
3) They often do not calculate the effective age correctly, which is typically 50% of the age of the house and way less depending on the remodels and repairs done.
4) They often do not use houses within 10 years before or after the comps
Get educated on the appraisal process so that you can double check the most critical aspect of your short sale package. For questions, contact me at 206.832.9590.
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