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I am currently under contract to buy property for $120K. It is listed for $170K per BPO. I am working directly with seller's agent and it is a short sale. Seller has signed off and we are waiting for the bank to get back to us. It has been 2 weeks. There is no 2nd mortgage, only a 1st for $407K. Property sold originally for $399K in 2005 and owner took out some money in 2007 to put in central A/C. It is a 2-flat with finished basement in Humboldt Park neighborhood in Chicago, which has been hit hard by foreclosures and seen values drop big time.
I own another building on the same block that I bought in 2006 for $360K, which is maybe worth half of what I paid (fortunately I have $100/mth positive cashflow from rents).
How long should I expect to wait on the bank to get back with me? Is it likely they will accept my offer? Rents are $2600/mth, btw, so it is a strong cashflow. My current property generates $2350/mth and I pay the utilities. The new property has utilities paid by tenants and landlord is only responsible for water. I also had my construction guy do a walk-thru with me to make sure the property is sound. It is.
Am I realistic in expecting bank to counter or do they just turn me down? By putting $1K earnest money down, this put property under contract so no one else is looking at it either. Other properties continue to sell in the area for less, so I expect comps to continue coming in lower. BPO was originally done for $185K but revised lower to $170K.
Will the bank deal and if so how long will it take? Bank of America is the lender.
Did BofA do the last BPO for $170K? If so, it seems unlikely they would take a 30% discount to what they would consider market value. What does the listing agent say about the status? Are they working with a BofA negotiator? Has all documentation been submitted?
The BPO was done by seller's agent using comps. Comps continue to come in lower, so he lowered the BPO from $185K to $170K. I think comps will continue to come in even lower over the next 3-6 months and when they go to re-evaluate, they will eventually get closer to $150K. My goal was to lock it up with low bid of $120K. If they take it great. If not, we just go back and forth in a declining market and no one else is bidding on it as it is listed as "under contract."
Will this work?
I have not heard of B of A doing the BPO yet as the property went under contract within 1 week of coming on the market as I know the area and the property (the renters too) well.
The banks have no idea what properties are worth in former "up and coming" neighborhoods on the west side of Chicago. These are neighborhoods that are 25% black and 75% hispanic. I was literally the only white guy on my block for the 4 years I lived there.
Many properties that need work are going for $25-50K. This property does not need work and has renters occupying the place. The only bad thing about it is there in no garage, but I can get past that as there is street parking and 3 parking spaces in back.
OK, B of A will do their own BPO before making any decision. The listing agent should contact B of A to get a time frame for the BPO, assuming they are willing to consider a short sale.
The listing and selling agents are prohibited from doing a bpo on a property for the bank. I'm sure you are talking about a CMA (compartable market analysis) being done by the listing agent. That is different from a bpo being ordered by the bank..and quite often the bank will order two of them at the same time to get the correct range.
Your agent, as stated above, should be able to find out from who ever is negotiating with the bank if bpos were ordered and if a negotiator has been assigned.
Per realtor, bank is getting ready to foreclose. Seller had not been making payments for over a year. The bank bought the property back this week and is contemplating taking my offer. The BPO was never disclosed to me, though I suspect it is higher than what I offered.
If the bank already bought the property back this week, then they already did foreclose. There is a waiting period of I believe two weeks before the 'sale' is finalized, and then paperwork has to be filed, etc. I was told by an attorney that I work with that can take up to 30 days for the file to be completed and official.
I will wait to see what the bank comes back with. The bank already tried taking it to auction but bought it back when no one bid high enough. I was not at the auction and do not know how much the bank bought it back for but I suspect it was more than I am willing to offer.
At worst, the realtor will give me my $1K earnest money back. Not too bad to lock up a property to put an offer out.
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BPO done by seller agent
