Property Flopping

Yep, flopping not flipping.  It is where a realtor does their Broker Price Opinion for the bank who is doing the short sale and has the value come in too low.  Then an investor comes in and buys it and flips it for a much higher price.  It might not be that the real estate agent is purposely coming in low but just as the article mentions, they are not properly trained valuation specialists.   

In a letter to Treasury Secretary Timothy Geithner, four groups representing appraisers, including the Appraisal Institute and the American Society of Appraisers, urged the Obama administration to prohibit the use of broker price opinions (BPOs) when valuing properties eligible for the Home Affordable Foreclosures Alternatives (HAFA) short-sale incentive program.

“Generally speaking, real estate agents and brokers are not independent or properly trained valuation specialists,” the groups said. “They have an inherent bias toward quick results and action, which produces a fee for themselves irrespective of whether the lender … gets a fair return on the short sale.”