(This is part 4 of 5 of the short series entitled Short Sale Basics)

The BPO

The BPO is that 3rd party opinion of value.  It can make or break the deal because banks look at this number as the letter of the law when it comes to your home’s value during a short sale negotiation.  When that opinion of value is reported back to the bank, they compare that value with the net payoff as shown on the HUD-1.  They don’t compare it to the sale price.  Remember, the net payoff is the number that matters.  If the net payoff is within a certain percentage of the BPO value, the bank will submit the offer to the investor for approval.  Most cases, if a file gets to this point, it will be approved.  The reason this is true is because most cases are Fannie Mae or Freddie Mac owned loans and they have already set standards that your servicer follows.