Answers - Real Estate

Ok, so you've received the short sale requirements from the lender and you've made friends with the loss mitigations rep that's assigned to your potential deal. Next, you are now ready for the lender to order a BPO on the property. Notice that I emphasize "you", this is because I don't wan

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

t you to miss out on a key opportunity to influence the overall outcome of your short sale.

Although many investors are aware of the benefits of influencing the BPO, few know exactly how it's done. The BPO is the single most influential component that the lender considers when deciding ho

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

w much they are willing to accept as a reasonable short sale offer. If your offer is not in the ballpark of the BPO it will most likely be rejected. Many investors give up at this point and assume that the lender is not willing to accept a short sale. It's not that the lender is not willi

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

g to accept a short sale, it's that the short sale offer does not come close to the amount of the BPO. It's just that simple. There is a big difference between a lender not accepting a short sale and a lender not accepting the offer.

What exactly is a BPO?

BPO stands for Broker's Price O

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

pinion. All this means is that a real estate agent or broker will assess the property and give their professional opinion of it's value to the lender. The closer that number is to your offer the better. You want the BPO to be as low as possible. Listed below is a snap shot of a BPO requir

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

ment.

1. Run comps and take pictures of the surrounding neighborhood, subdivision, or area.
2. Inspect the overall condition of the home and estimate the cost of repair. Take pictures.
3. Formulate their "opinion" of the property's value based on the information that was gathere

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

d.
4. Submit a detailed report of their research to the lender.

Here are 5 necessary steps to influence the Broker's Price Opinion (BPO)

Step 1:
Before your package is submitted ask your loss mitigations rep to order the BPO. Let them know that there is not a lock box on the do

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

r and you have the only key. Give them the best number to reach you and have the agent doing the BPO call to set up an appointment. You must be present for the BPO.

Note: There are two types of BPO's:

a) Full BPO - The agent does a full inspection of the home.
b) Drive by BPO - The

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

agent only takes pictures of the outside and other homes in area.

Always request a full BPO. If a drive by BPO is done you will not have any one-on-one time with the agent, therefore eliminating any possibility of influencing the outcome.

Step 2:
Compile comps, estimated costs of

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

epair, and any other relevant information that will justify a discount. If possible, visit the property prior to the BPO or at the least a half hour before the agent arrives. Make two lists for repair costs. One with all of the obvious repairs such as wall damage, carpet, paint, etc. The f

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

irst list will be mostly cosmetic repairs. Make a second list of all repairs that the agent will not see with their naked eye (i.e.: roof and water damage, faulty plumbing or electrical fixtures, pests, mold, etc. This list will contain more serious problems. Be sure to have an itemized br

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

eakdown of the costs involved. Bring this information with you to the BPO appointment. Be prepared to explain in detail how you came up with your estimates.

Step 3:
Make sure if the house is occupied that the homeowner is not present during the BPO. You do not want the agent asking t

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

e homeowner any questions about the property or offering any unwanted information. All communication must be between you and the agent. Follow this rule each time and you will maintain leverage during your negotiation.

Step 4:
On the day of the appointment shadow the agent as he/sh

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

e does their assessment. Bring a camera and take pictures of every room in the house. The agent will only take a limited amount of pictures and may miss something important. As you are walking throughout the house, point out the most important repairs only. Take notes and make them aware

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

f other homes in the area that are comparable to your offer. Share with the agent the information about the house that you've compiled. Doing these things will help establish you as a well prepared professional and help you earn respect with the agent.

Step 5:
Before the BPO is comp

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

lete, ask the agent if they have a ballpark estimate in their head. They will most likely tell you that the numbers will be determined once they complete their report. At this time, ask when they will be finished and if you can give them a call at a specific time to get their final numbers

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

Note: The agent works for the lender and more than likely they will inform you that their report is proprietary to the lender. You have to feel that person out and see if they may be willing to share that information with you. It doesn't hurt to ask more than once if necessary.

Let the a

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

gent know that you are very familiar with the neighborhood and tell them what you think the property is worth. The agent doing the BPO knows only what they have researched and what they discover once they actually see the property. You will be surprised as to how much your opinion matters.

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

I like to call it YPO (Your Price Opinion). If the agent views you as someone who is educated about the property and the activity in the neighborhood your opinion will be valued and taken into consideration when they make their report to the lender.

Hopefully I've helped shed some light

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

on this most important area of short sale negotiations and that you are able to apply what you've read to your next deal.

Best Wishes!
D.C. Fowler
Author of Making Money with Short Sales
http://www.ShortSaleDeals.com

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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Answers - Short Sales - How to Influence the Broker's Price Opinion (BPO)

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