If you’re buying a short sale you should know what BPO stands for:
Broker’s Price Opinion
What does that mean? When a bank gets wind of a potential short-sale, i.e. the seller has gone through the required steps so the bank actually gives them the OK to proceed…they’ll ask a local real estate agent to do a BPO. The agent will then perform a comparison with recent sales, market data, the house condition, etc when they set their recommended price.
Here’s the key…
If the BPO isn’t done….the bank has NO idea, NONE, what the value of the house is. That asset manager sitting at their desk in Tulsa has no way to evaluate the subject property in Virginia without the help of a local expert. Again – real estate is local. This is where the LONG delay comes in with short sales.
Getting the BPO approved means the bank acknowledges the property is up for sale, and at the recommended price. This way, when they get an offer near/at the price, the process to move forward and get the contract ratified can be QUICK!
Short sales can be tricky, and long, and frustrating, and costly (opportunity costs for the time spent waiting). It’s better to get as much information as you can before you head blindly into one.