REO, Short Sale and Pre-Foreclosure BPOs: What Changes
Distressed-property BPOs ask different questions. Here is what changes for REO, short sale and pre-foreclosure orders.
Many BPOs are ordered because a loan is in trouble. The stage of distress changes what the servicer needs from you.
Pre-foreclosure
The borrower is behind but still owns the home. The servicer wants to know value and condition to decide on options such as a modification or short sale. Occupancy is usually owner-occupied; be respectful and stay on public property for exteriors.
Short sale
The owner wants to sell for less than the loan balance. Your value helps the lender decide whether to accept an offer. Expect scrutiny of your comps; everyone involved has an interest in the number.
REO (bank-owned)
The lender owns the property after foreclosure and needs a listing strategy. Condition is often poor, the home may be vacant, and repaired versus as-is values matter a lot.
What changes in your report
- Occupancy is critical. Note signs of vacancy: overgrown yard, notices on the door, no window coverings.
- Condition and repairs deserve detail, with rough cost estimates if requested.
- Marketing time is often longer for distressed properties.
- Distressed comps may be the most relevant evidence.
Safety
Vacant distressed properties can carry risks. Never enter without authorisation, and trust your instincts on site.
Related: BPOs in a declining market.