REOs, or real estate owned properties, are owned by banks or a government loan insurer. Performing BPOs for bank owned REOs is a unique situation, especially with the current trend of REO-to-rental.
When a property goes into distressed status, the beneficiary (the bank or GSE) will want to determine the property’s equity. The equity is often established through obtaining a Broker’s Price Opinion (BPO) or by ordering an appraisal. Based on the amount of equity that is determined from the BPO, the bank will decide whether to allow a short sale (if requested by the homeowner). If no short sale takes place, the beneficiary will continue the foreclosure process. If the beneficiary is unable to sell the property through a short sale or at a foreclosure auction, the property will become an REO.
Once a property becomes an REO, the beneficiary will sell it, either on its own or with the help of an REO asset manager. Some properties will be listed with the broker who performed the BPO for the REO. Bank owned REOs are appealing to real estate investors looking to lease them as REO-to-rental properties and eventually flip the properties when the housing market recovers further.
Pro Teck offers all industry standard BPOs, but always starts out by asking “Why?” How is the BPO to be used? Is it a BPO for REO disposition? What is the client’s process post-delivery? We approach every valuation with your needs in mind – and can custom configure BPO reports to fit the needs and philosophy of any lending institution.
All submitted reports are carefully reviewed against a set of comparable sales data including:
When merited, reports also include addendums detailing exceptions and how they may affect valuation and risk. With BPOs for REOs, network brokers particularly need to take into account the appearance and state of the bank owned REO property. Neglect and disrepair may negatively affect the BPO.
Brokers in Pro Teck’s vendor network have a thorough understanding of BPO regulations and REO BPO compliance and will perform BPOs for REOs that are fair and balanced.
For more information, contact Pro Teck today.