As we discuss in this month’s newsletter, for the past several years BPO’s (Broker Price Opinion) have been the primary method that note servicers/note holders used to establish the short sale property’s market value. The servicer might have ordered a more expensive appraisal for FHA and higher priced properties, but most of the time it was a BPO.
However, change is in the air. Over the past several months we have seen more and more appraisers being used at all price levels. I would recommend showing up prepared as we have discussed but appraisers will probably not need as much information as it is their profession. Still, it’s a good idea to make sure they know any major defects of the property and any mitigating factors of the neighborhood that would affect the property’s market value.
Change is not always a good thing but I would view this as an overall positive step. The short sale landscape is always changing and it is always better to be on top of the changes and incorporating those changes into your overall approach. If this change is real and permanent it should make short sales a little easier as the valuation stage should be more accurate and not such a glaring weak link.