In my areas of Sparta, Hamburg, Vernon, Wantage, Frankford, etc., more and more homeowners are having difficulty paying the mortgage. Once a homeowner is several months late, the mortgage company/bank starts to consider its options. Some options will keep the owner in the home by modifying the loan; some will mean the owner must list the home for sale.
When a distressed property needs to be evaluated by the bank, one or more Broker Price Opinions are normally requested - very often through a third-party, outsourced vendor. BPOs are not as detailed as an appraisal. A BPO is a quick assessment by a real-estate agent that gives the bank an idea of what the home could sell for within the next 90 - 120 days. It is based primarily on MLS listings of similar properties in the same neighborhood.
I have done countless BPOs around Sussex County. I view BPOs as a discussion of list price with a potential seller, albeit one who is far away and has never seen the property. I am that bank's local real estate agent for the sake of a price opinion. (While my experience has been localized, I do BPOs for the same vendors and same banks that get them done across the U.S. Hopefully, my opinions and expertise might help someone elsewhere.)
Here are the main reasons I've been hired to do BPOs in Sussex, Morris and Passaic Counties:
- A homeowner is late and the bank is weighing its options - perhaps deciding whether to foreclose or consider a work out;
- The owners have no means of remaining in the home and have listed or are prepared to list it for sale, have had some hardship and are asking the bank to consider a Short Sale;
- Potential buyers have put in a written offer and the bank needs to evaluate it based on today's market conditions;
- Foreclosure has occurred. The property is now an REO and the new owner (the bank) needs to set a price for the sale of the home.
Reason 1 is the type I like least. These owners are usually unaware that the bank is having a BPO done. (The mortgage documents specify the rights of the bank to inspect the property under prescribed conditions.) This will always be an exterior or drive-by BPO for which I need to get my outside photos very, very discretely and be prepared for some unpleasantness if the owners drive down the street and spot me... Too, these home are not currently listed for sale, so there is no MLS listing with current interior photos. My research will take much longer.
With the other 3 reasons, the sellers are typically supportive of the BPO. Many times I am hired to do an interior BPO. By appointment, I access the home and take interior & exterior pictures. Frequently, multiple BPOs are done on the same property within the same time frame. The current record for me is when I was in one Lake Mohawk home for sale at the same time 2 other agents were also taking their interior pictures! Triple opinions from real estate agents working for 3 different brokers but it was a very high-priced home. This indicates just how inexpensive a BPO is, but I'll return to that later.
Future posts will detail which BPOS I will agree to do, what information I provide, the stumbling blocks I've encountered, how listing agents view my BPOs and my compensation for these efforts.
Part 2: Pink Elephant BPOs based on a case in Sparta, NJ.
big on funny and you're most welcome to laugh at me along with me!)
Our moose-hunting arsenal consists of a couple cameras and a tripod, so no need to alert PETA to my plans. I may never blog again because I've warned Chip that I am staying in the White Mountains until I see a moose. He pointed out that it is a very long walk home, lovingly adding that he'll miss me in the interim. Bet you will too!
We're in real estate. We're in the business of selling homes to people who 99.99999% of the time are already living in a home they've made for a year or more, meaning that at some point, they're going to have to pack their lives into boxes, load a truck, and move to their new nest. Many Realtors believe that the real estate process ends when the Escrow company closes the books, pays out the taxes and commissions, and gets the deed on title. There are a few quite awesome realtors, however, who pitch in with their buyers and sellers and help them when it's time to go. 
interest in owning a farm outside Sussex County that met very special requirements. Now, Chip is a real estate agent who specializes in land in the New York, New Jersey region. Chip, who just happens to have an excellent working relationship with a great residential Realtor, proposed we team up to see if there was anything out there for Max.
following day. Max, his wife, daughter and friendly dog met Chip and me at the farm on Mother's Day. I waited until the next day (yesterday) to call the listing agents to try to get answers to the questions the Max family had and to explain that nothing more will happen until we can see inside the guest house, which has just been vacated. I do believe the listing agents are now hustling...
Unknown conditions. The bank has no history on the property. It does not know if there is an old oil tank buried. The age of the roof is a mystery. Most banks have not even had one of their own employees visit the property. The BPO and photos are normally the basis and extent of the bank's knowledge. I've never had a bank hire a home inspector to do a more thorough job. So, yes, there is more risk for a buyer. This is true not just for foreclosures in Sussex County NJ!
No face-to-face chats. When I represent the buyers of Sussex County homes for sale, I often ask the listing agent if he or she can arrange to have us sit down together with the sellers to present my buyers' offer and to negotiate a deal. (Buyers not present but "on standby" via phone.) This isn't a possibility when the bank owns the property. Furthermore, the bank does not give a hoot that Sally & Jim look forward to raising their growing family in this home. The bank doesn't care of the local chapter of the Hell's Angels is purchasing the REO. The bank cares about the bottom line and the speed of the closing. The listing agent prepares a "net sheet," preliminary HUD-1 or similar form to show how much money the bank will net, based on the offer presented.
