How To Make A Short Sale Offer

Thursday, April 2nd, 2009 at 2:16 am

You must first determine the Fair Market Value of the property (FMV). You will establish this by looking at sold comparable properties in the area of the subject property. Be sure to compare homes with a close square footage, the same amount of bedrooms and bathrooms, and other characterizing features. You will want to use homes sold within the last 12 months and within 2 miles of the subject for the most accurate comparison.

Your next step is to determine the After Repair Value (ARV). This is somewhat comparable to the FMV with the difference being made up of the amount of the estimated repairs the property will need in order to sell fast. You may hear real estate agents using FMV more often and real estate investors using ARV.

Next is to figure out the Broker Priced Opinion (BPO). This is perhaps the single greatest value determining factor in your short sale offer. This is how the lender will determine what the property is worth on paper. The BPO is ordered by the lender and is performed by a real estate agent assigned to the property.

Lastly you must take into consideration the minimum accepted net offers based loan type of BPO or FHA appraisal.