Hi Everyone,
I am learning a lot as I'm continuing my real estate journey and wanted to share this with the hope that it helps someone else.
Made an offer that was accepted by seller. I put some contingencies in the contract. One was that the property would appraise for offered purchase price. If not, earnest money is returned in full.
Our bank requires a bpo - broker price opinion - and they choose the broker from their approved list to come out and determine the value of the property.
The broker does not know the selling or purchase price of the property.
The broker who completed the bpo for the bank came back with a figure that was almost 20 dollars less per square foot than the price.
The seller contested the bpo. Hired an approved broker from the bank's list and had another bpo completed.
Property still came back under the price, but it is much higher than first one.
One difference between bpo and appraiser - appraiser usually knows the selling and purchase price.
What difference does that make?
The bpo is going to make the appraisal without consideration of what it "needs" to appraise for. The appraiser sometimes knows what the property should be in order for the sell to occur.
We could hire an appraiser, pay out of pocket for the appraisal, and see where we stand. We are not ready to do that yet, but it is still an option.
Again, just posting to share the information in case anyone is in a similar situation.
Melinda
- in VERY rural northeast Texas
