Las Vegas Short Sale listing agents are sometimes paranoid and go a little too far to make sure their short sale listing has a BPO (Broker Price
Opinion) or appraisal coming in at the right price. Sometimes they absolutely have a right to be paranoid because they did the right thing and had a bad BPO or appraisal come back. Sometimes they are not doing the right thing and they have priced the home too low and/or are taking “both sides” of the transaction. (Please note: representing both sides of a transaction – “dual agency” – is not wrong when it is done properly!)
I call the latter “shananigans” when they are willfully & knowingly doing it. Usually with shenanigans they will go extra lengths to make sure it goes through at all costs even though sometimes it may not necessarily be the right thing. Those of us that do perform BPOs on a regular basis (and are not BPO mills) and appraisers – we can spot them a mile away and we laugh in their general direction. They probably learned this technique from some fancy course they paid a lot of money to attend or even an informercial (those get rich quick in real estate ones are out there teaching investors how to game the system).
The wrong things to do:
- Hand a list of comps. A list does me no good. The list usually doesn’t contain real comparables or adjustments. The list is usually a joke. Homes with half the lot size or half the interior home size. Sorry Charlie.
- Take a vacant home off lockbox and require appointment only. Your MLS sheet is shown to the entity ordering the report. It makes it look like the property is not marketed properly because it cannot be shown easily.
- I am not a home inspector or a mold remediation specialist but we are required to take lots of photos. Mold seems to be the up and coming show stopper in the showing instructions “Bring your mask” is in the agent to agent remarks. Some go as far as removing drywall to make it appear a water damage has happened. Now, I am not a home inspector or a contractor but photos can tell a big story if water damage has occurred or not. There is a little more too it than just missing drywall or the threat of bringing a mold mask. I am sure that asset managers and short sale negotiators sitting in desks thousands of miles away can tell the difference also. We run across real ones all the time. There is evidence from smell and sight. If the evidence doesn’t add up, you lose.
The right questions to ask & things to do:
- Hand us a real bonafide CMA with real comparables and adjustments.
- Give us estimates of repairs from real contractors (that can be verified).
- Request in MLS for BPO agents and appraisers to notify you of an order if the property is vacant.
- Ask if we are the ones really doing the BPO and not a BPO mill. Yes, there are BPO mills out there that chop the report into pieces and assign different parts of the report to different agents.
- Ask what experience we have in the area.
- Ask how many years we have been doing this and how many we have performed.
Besides – checks and balances – plenty of exterior orders are performed. Just because we are there front and center doesn’t mean that someone hasn’t driven by at the butt crack of dawn to take an exterior photo and cranked out a report.
This is part of the process and asking things the right way will assist in the process. Asking things the wrong way will just cause you to put more time and energy than necessary. It will also cost the lienholders in losing more money than they have to – and a possible larger deficiency for sellers – if the deficiency isn’t waived.
Don’t get me wrong, shenanigans are rare – yet they are easy to spot. Shenanigans are used to willfully defraud a lender and get them to accept a lower price. As a seller, think twice before you participate in shenanigans. You could be punished not only for fraud but more likely for a higher deficiency because your property didn’t net the “highest and best.”
It’s not worth it in the end. Fraud is investigated regularly and retroactively – way retroactive. Go check out the FBI’s website to see what they are investigating if you don’t believe me.
If you are thinking about selling your Las Vegas home via short sale, click here.
Renee – I must admit I had no clue some listing agents went through those lengths trying to get a lower BPO. Your "to do" and "not to do" list should help a lot of agents out and even newer BPO agents.
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How and to whom would a person report a BPO mill operating in the greater Vegas area that is using non real estate personnel to complete the BPO's?
You will want to report it to the Nevada Real Estate Division! http://www.red.state.nv.us/
If you are aware of a BPO mill using non-licensed, non-real estate individuals to complete BPOs, who can you report this information to?
You will want to report it to the Nevada Real Estate Division: http://www.red.state.nv.us/