Using an Exterior Broker Price Opinion to Purchase REO’s
Posted on | December 21, 2009 | No Comments
Many homebuyers and sellers look to save money but never think of using an exterior broker price opinion to reach a fair market deal for the home. But recently, exterior broker price opinions have been used extensively, especially for REO properties that are abundant and not moving as quickly.
The list has overwhelmingly grown for bank owned properties, more commonly known as real estate owned, or REO properties. These foreclosures have multiplied way beyond what the banks were prepared for and now banks are looking to off load the homes while keeping expenses down. So they’ve turned to using an exterior broker price opinion to develop a fair market value to price these homes.
What is an exterior broker price opinion? It’s an opinion conducted by a licensed real estate agent or broker of the home’s value. It’s by no means all-encompassing; for the purpose of selling these reo foreclosed homes it only provides a snap-shot view of what the home *may* be worth. It doesn’t take into consideration the intricacies of interior effects. The licensed realtor or broker performs a drive-by and using their professional experience and knowledge they produce a price for the bank. This price is what they believe the bank should sell the property for and what the bank could reasonably receive in its current condition.
Why would banks want to use this method when it’s not based upon a true well-thought out cost analysis? This is because it’s much cheaper for banks to pay up to $50 per home instead of paying for a certified appraisal which could cost about $200 per home. Banks have already lost money on non-payment of mortgages and the entire foreclosure process so now it comes down to getting these reo properties off of their books.
However, can the home buyer count on the exterior broker price opinion as a fair opinion? Not always.
Take into consideration that the banks want to recoup as much money as possible. An exterior broker price opinion doesn’t really get a full picture of the foreclosed home’s worth. No structural considerations have been introduced when you rely on the exterior broker price opinion. This is why many investors who purchase a reo property submit a new offer and try to renegotiate the selling price.
For new real estate investors looking to purchase a reo property it’s not something to dive into lightly without the benefit of professional knowledge. If you’re relying on exterior broker price opinion for a market value of an reo property you should perform your own investigation to ensure you’re getting the home’s true value.
Tags: Bank Owned Properties > Banks > Broker Price Opinion > Broker Price Opinions > Current Condition > Foreclosed Homes > Foreclosure > Foreclosures > Home Buyer > Homebuyers > Intricacies > Licensed Real Estate > Money Broker > Mortgages > Much Money > Professional Experience > Real Estate Agent > Realtor > Reo Properties > Snap Shot
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