wamu % of bpo they generally accept?

[ryanpal]

hey guys. i just found out what the bpo came back at ($193k).  does anybody know what % of the bpo they generally accept?

[Summit]

All depends on how you personally Negotiate.. What price are you trying to purchase the property for? maybe we can give you tips on how to get it there

[ryanpal]

yes i understand it depends on your negotiating skills.  i understand there are certain %'s that are a general rule of thumb.    for example FHA backed loans usually accepting around 88-92%.

thats basicaly what i was looking for just to get an idea of WAMU's acceptence numbers.

[short sale girl]

It is not who the lender is, but who owns the loan?

[kentate]

Ryanpal,

What a great question. I asked a like question a few years back when I attended a HUD class. From years of experience closing between 50 and 100 deals a year with almost all being foreclosures, here are some things to consider.....

One must first understand how a bank works on a foreclosure. Do they just go off the BPO or like most today, do they actually have the home appraised by a licensed appraiser? In many cases, the bank will do both.

Now let's say the bank has a foreclosure and they've had the listing agent do a BPO and let's say the BPO was $200,000. Now, the bank has ordered an appraisal and the appraisal comes in at $205,000. OK, the two numbers are within 5% of each other, so the bank may take the higher number....And that's not the worse part. The bank will generally gross up the higher number by up to 5%. So that means that the starting ask price may be $215,250 (205000 X 105%).

As a general rule banks will negotiate trying to get within 3% of the "current" list price within the first 30 days....After all, they have an experienced agent and a licensed appraiser that has just told them that the home is worth about $200,000 or maybe a bit more.

From the agent's standpoint, he should bring in offers that will allow him to keep getting other listings from the bank. If he starts bringing in offers of a much lower value, he has just put his future on the line and the same can be said for the appraiser.

Now things get interesting. After about 30 to 45 days, a review of the listing is done. Based on the number of offers, showings, second showings and feedback, a suggestion might be made to lower the price. Just like everything else, one must consider the facts. Has the home been vandalized? Have values in the area gone up or down? So lets say a decision is made to drop the price by about 5%. OK, the list price was $215,250, so a drop would bring the price down to $204,487. Hey, notice that we're now about where the BPO and the appraiser suggested the home would sale anyway.....Well, we're close.

Now the bank starts another 30 days cycle. They are actually looking for about 95% to 97% of that list price. And again, keep in mind, the Realtor's reputation is still on the line.

I've seen banks take offers that are in the 90% range, make a full price counter-offer and then they play a game that most aren't aware of......they wait.....Why do you think a lot of banks say it'll take 2 to 7 days to get a response? Did you think there was a committee that needed to review the deal? They are actually waiting to get another offer.....Notice I didn't say a better offer, but another offer.....This kicks in with what the bank wants and that's a bidding war. So the bank goes back to both and states to send in your highest and best offer? Well that kicks in a whole other set of questions.....

So how long does the above cycle go on before what many investors ask, "when are the banks going to get real on their pricing"? Remember, again, the bank has been told by the agent and the appraiser that the value is near $200,000.

A much better question is when does the price really start to come down? That depends. Let's say the home is in the middle of Plano, or Frisco and there are several showings, maybe 10 to 12 or maybe 15 or even more a month. The bank may decide that with that type of interest, they'll just leave the price where it is....But if the home has remained on the market for lets say six to 8 months and isn't getting any showings, well, that's when the bank may start dropping the price.

Most of my purchases have been after the property has been on the market for more than 6 months.

In closing I'd suggest that most ask the following question and be fair with your answer.....Why would a bank have a BPO and an appraisal done on a property to turn around and accept 10% or more less than that number, especially when there's a listing agent advising them not to accept that offer???????

[LyonelK]

Ryanpal,

If you ask me you are lucky you found out what the BPO came in at. Typically a bank will not give out the results of the BPO because it allows you to manipulate your offer. Both banks and investors have different guidelines for what the minimum value they are willing to look at.

Also if time if on your side and you have a patient buyer you can test the waters. My experience tells me to put an offer in that is within 80-85% ball park (if you have time to explore what they are willing to accept).

Hope this helps!

[michelle1976]

Hi Ryanpal, you should call the bank and ask them what type of loan it is i.e. conventional, fha...
If you can tell us that information we will be able to tell you what percentage of the bpo they will take

Michelle

[ryanpal]

kentate,

interesting info you've provided.  i understand what you're saying.  some lenders accept a lesser % of the bpo than others.  i just wanted to get some feedback from those who have closed short sales with WAMU to get an idea. ;]

ryan

[ryanpal]

Ryanpal,

If you ask me you are lucky you found out what the BPO came in at. Typically a bank will not give out the results of the BPO because it allows you to manipulate your offer. Both banks and investors have different guidelines for what the minimum value they are willing to look at.

Also if time if on your side and you have a patient buyer you can test the waters. My experience tells me to put an offer in that is within 80-85% ball park (if you have time to explore what they are willing to accept).

Hope this helps!

my experience has been quite the opposite.  i've been told the bpo many times and the bank usually is strict in trying to obtain offers close to this number.

i've also heard other investors mention that loss mitigators will actually lie about the  bpo.  so just because they disclose this info doesn't necessary means it's hurting them.  it can be a negotiating tactic.

ryan

[ryanpal]

Hi Ryanpal, you should call the bank and ask them what type of loan it is i.e. conventional, fha...
If you can tell us that information we will be able to tell you what percentage of the bpo they will take

Michelle

michelle,

thanks for your reply.  i know FHA loans you can typically get for 88% of the bpo (i've read some that have been obtained for as low as 82%).  this post should have been more detailed i apologize...this is for an investor backed loan.

ryan