Once you have sent your offer of 55% of the lowest average comparable and deducting for any repairs to the bank, the bank is going to hire a third party company to have a look at the property that is being discounted or what it is called a short sale transaction.
The following steps are what you have to consider to have a successful outcome from that third party that is doing the BPO/Appraisal.
Make yourself the contact person for the process.
When the third party company that is calling you to schedule an appointment, you want to make sure that the person on the phone knows the fact that this property is been foreclosed and do they know that it has a contract to be sold. Most of the people just want to come out and take pictures and run to the next one. They are in it to get as many done in a day as possible because they are getting paid minimal money to do this task, most of them being Real Estate agent that are not producing enough for a living. Build a rapport with them right out of the door and ask them a few questions while you have them on the phone. For examples:
Do you know that the bank is looking for a quick sale value on this home?
How long have you been doing BPO/Appraisals?
As you are listening, you are on a mission to gain information. You will be able to use this information to give you more details on how to proceed with this particular person before meeting them at the property.
How many of these inspections are you doing a day?
How many have you done in the last month/last week? And so on…
What is the name of your company/Phone #/Fax #/cell phone#?
So you can contact them ahead of time to confirm your meeting when set.
I also call some of them time to time for tips about new foreclosures.
If it is a Realtor, ask if they do a lot of REO’s.
This is a bank foreclosed home that Realtor’s like to list after they have been foreclosed on. You want to be sure on this because it will help you know how to proceed in handling the person in the field.
If it is an appraisal you are going to
You want to know this as well because an appraisal will be a little longer than a BPO. They are going to measure the property just like they did when it was purchased. They will do the size of bedrooms, how many rooms, all interior pictures, front and back pictures of the house and more…
Compiling all the right paperwork to take to the meeting at the house consist of the following:
A folder that has all information about the property
Write in big “Foreclosure” and “Working with banks and sellers to liquidate properties” on the front of the folder.
A copy of the purchase and sale agreement
You sent it to the loss mitigation department. It should be completed and executed in a time frame of 30 days or less.
A hardship letter
The hardship letter we were talking about here from the seller explaining why they are losing their home.
A repair estimate of the house
All documents supporting the value that is being offered. Made you homework here. You’ll get better at it with experience though.
Low comparable from the property
Get you comps from Real Estate agents, MLS and so on. Get the lowest 3 similar LISTED and 3 SOLD properties. The keyword is lowest here!
Articles from newspaper or online articles
Try to get newspaper articles explaining the down turn of the market or any problem of the area where the property is located. Check online local newspaper as well.
Copy of the building sketch of the property
If it is an appraisal, supply the appraiser with a copy of the building sketch of the property. This will put a smile on the appraiser face because it helps them get their job done sooner. This move will instantly put yourself as knowledgeable and therefore, your numbers as much more accurate, even if you may be a bit low
The day when you are meeting them at the property
Make sure you call and confirm they are going to be on time. Be professional.
Arrive early so you have a chance to get a feel of the house
Drive by the neighborhood and look for any signs in yards. Take them down if any and remove any flyer/advertising you may have at the house. You do not want them to know what you are marketing it for. Look around the house for any new damages or negatives to point out.
When the agent gets there
DO NOT HAND them the package you have. Lay it down somewhere visible in the house (kitchen counter or on bar). Start building a rapport with them. Have a conversation about anything, something in common (have a quick look at his/her car bumper sticker. You most probably see something he/she like to talk about: pets, football team, etc…). Ask how they are doing and get a little personal.
Do not start bashing the house
As if you want a low value, it is important though that you don’t bash the property. Let them in and walk the house showing them around from behind them. That will let you read their body language. Do not get up in their face. Be nice and have a sense of humor about the meeting and that you two are in this together.
The Big Question!!
When the agent/appraiser asks who you are in this process, whenever this comes up, either on the phone in the beginning or on the way there when you are confirming the appointment, DO NOT LET THEM KNOW YOU ARE AN INVESTOR. You are just the person meeting them there to show them the house. Minimize yourself. If they ask you if you are the listing agent or the Realtor® and you are not, let them know that our company works with the seller and the bank to liquidate the property. If you are a Realtor® then answer yes I am a Realtor® but working to help the seller.
What should I wear to this meeting?
Try not to over dress or look like you are better, smarter or know more than they do. Play at their level or below. Allow them to be in control or at least think they are in control (better results). Ask them if there is anything else that they need. Include a couple of newbie’s questions about their field. Leave an impression that you know he/she is the professional here.
Getting the package in their hand.
Talk a little about the market and show them things that need repair along the way. However, be helpful not forceful. When you pass by the package pick it up and let them know you have a copy anyway. Inform them that it contains info like comps, the current purchase agreement, etc… You don’t have to tell them everything in it because they can see it for themselves. You want them to ask you for it. Let it be their idea of getting it instead of it seeming like you are forcing it in their face, you must take this type of approach.
What do you think of the value?
After the meeting, hint around about the value. “What do you think the value will come in at?” “Ballpark figure”. Come across with the seller needs to sell attitude rather than they want to sell. If the agent/appraiser will tell, that is okay.
Can I follow up with you?
Have either yourself or someone else follow up with them 24 hours after the value was done. Thank them for coming out, be polite and ask them if they have completed the value and sent it in to the bank.
Calling 24 hours later.
Start out asking them how it is going. Then ask them if they have completed any more inspections since the one they did with you. By this time you should have an idea of how well they are going to respond. Just ask what they thought the value came in at and did the value come in around the contract price.
After that, call the bank and ask if they have received the value and can they accept the offer that you have submitted. If not, ask them to call you back with the approval as soon as they get it.
Dec 27 2009