Short Sale Disputes With Lenders
Short Sale Dispute Process
The process probably looked something like this:
During the course of the short sale, the short sale lender sends out a third party agent to complete a Broker Price Opinion (BPO) for the short sale listing. This can be as simple as a drive by-but in most cases they will have to peak inside of the home.
Then, the bank, in most cases, bases their price on the value stipulated in the BPO by that third party agent. Often time, there is a discrepancy between the value stipulated in the BPO (what the bank wants) and the offer amount (what the buyer wants to pay). In many cases, what comes next is a valuation dispute. And, at some lending institutions, this is much easier to complete than at others.
Also, it is highly recommended that the listing agent be present at the BPO's so they can discuss the value, and the condition of the home. This will help the value come back at the desired price point.
Presenting Your Short Sale Dispute
If you find yourself (or have found yourself) in this situation, here is the evidence and facts you will need in order to support your evaluation dispute:
- Provide comparables that are recent, proximate (nearby) and similar to the property in question.
- Recent comparables that are no older then 180 days.
- “Proximate” varies by location. In a rural area, for example, a home five miles away could be considered proximate.
- You should be able to provide additional notes to highlight characteristics of the comps.
If the dispute centers on property condition or hazards:
- Provide an itemized estimate from a licensed contractor on the contractor’s letterhead.
- Provide photos to illustrate the repair, condition issue or hazard you want to highlight.
- Provide the inspection report to the BPO agent, so they have a clearer picture on the condition.
If your valuation dispute relates to condition and significant repairs are required:
- This will lower the subject property’s value.
- It’s best to have multiple bids in order to support your position.
- Anything considered cosmetic the bank will not take into consideration. The problem has to be something major as foundation, mold, roof issues etc. New carpeting and paint does not count as something to be considered.
Big concerns as far as condition, legitimate supporting documents to support your cause, and an informative realtor will lead to success in a short sale valuation dispute.
The valuation disputes are certainly not fun, but with the correct paper work they can be done and worked out promptly.
Lang Premier Properties is home to a leading Oakland County Short Sale Realtor. Specializing in all aspects of real estate including West Bloomfield, MI short sales, foreclosures and working with home buyers and sellers with Macomb County Luxury homes. When you hire Lang Premier Properties, whether you are purchasing or selling Metro Detroit Real Estate, you can rest assured that you are in good hands.