BPO Problems With Banks Will Remain
Kevin and Fred, the leaders of Group 46:10, Arizona’s premier short sale squad, are chatting today about pricing and listing. Before you shut the video off since you already understand how to list and price, hear them out. Depending on your market, you may not be experiencing the similar stuff as Kevin and Fred are in Peoria. As many of you know, the deadline for taking advantage of the tax credit has passed. What we are seeing right now in the market is a little bit less motivation from home buyers and house owners. The supply is starting to grow and that usually leads to prices going down. When you notice that trend, you tend to have more disagreements with banks concerning the value of homes.
There are several of the similar challenges in 2010 that we had in 2008. Banks love to look at sold comparisons. Still, if you want to deal with the variation in the market you need to compare values with active and pending listings. Price yourself ahead of the market if you want to sell the home.
At present, the BPO’s are coming back higher than what they ought to be in Kevin and Fred’s opinions. There have been discussions with Chase bank where they have raised the BPO value because they oppose with the BPO agent’s number.
It is critical to appreciate that there will be more BPO troubles in 2010. Other parts of the country may not go through these problems if your market has only depreciated 10-15%. Yet, in the Arizona real estate market, with depreciation levels approaching 60-70% in some cases, there will be BPO issues.
The lender will perhaps make some mistakes and foreclose on some homes. Do not be shocked if it takes them a while to adjust their own practices through this change in the market.
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