Broker Price Opinions in Nevada

[George Hatch]

The state appraisal board might not have jursidiction over a licensed broker, but the agency that licenses the broker could prevent them from doing BPOs except for brokerage purposes.

Of course, all that's going to happen then is that people with even less technical ability will be recruited to perform "evaluations".

 

[robert higgins]

Here is a California appraiser offering Broker/Appraiser Price Opinions
http://www.knappraisals.com/index-5.html


Ok I think I seen everything, check out the BPO and ERC Forms.
http://www.appraisers-brokers.com/fees.htm

Nice article on BPO's
When is a BPO or Broker Price Opinion Used?
http://realestate.about.com/od/lendingandmortgages/qt/bpo_used_when.htm

 

[xmtraterbcra]

Fannie Mae has a BPO form that is referred to as "3/99" and distributed as an MS Word file "BPO.DOC". The last page requests both a "Market Value" and a "Suggested List Price" for both "As-IS" and "Repaired". No wonder there is confusion. ...

http://www.owenreollc.com/forms/BPO.doc

How is this possible given existing regulations?

Bert Craytor, SRA

 

[Greg Bell]

"The cost of the appraisal is to be avoided"..Lenders really don't want us around..

 

[Couch Potato]

Fannie Mae has a BPO form that is referred to as "3/99" and distributed as an MS Word file "BPO.DOC". The last page requests both a "Market Value" and a "Suggested List Price" for both "As-IS" and "Repaired". No wonder there is confusion. ...

http://www.owenreollc.com/forms/BPO.doc

How is this possible given existing regulations?

Bert Craytor, SRA

Do you not think hiring a broker is a good idea when you have property to sell? When you have a large amount of property to sell, don't you think a standardized form would help in choosing which broker to allow to list the property? Fannie has many forms that are unrelated to appraisers.

 

[SANDY]

The real issue is USPAP. It has tied our hands and limits our ability to adapt to the demands of the market. On the one hand the market wants cheaper opinions of value. On the other, appraisers can't get much cheaper because we cannot eliminate certain requirements to reduce our times and effort to opine a value. We have to comply with USPAP. Noone else does. And, they are able to throw together some stats and form an opinion.

I'm not anti-USPAP. But, the situation currently has the market circumventing us to get what they want and there is no way we can provide the market with what it wants.

The only solutions are to either do away with USPAP requirements or for the industry as a whole to require that only an appraiser can opine a value. Of the two, the industry would rather see USPAP gone than tie their hands. Unfortunately, noone is going to remove our bindings to USPAP so long as they can get what they want by going around us.

Bingo!!!! talked to a Realtor who retired from his high up executive position with Suntrust Bank and he made an interesting observation---- now that lenders are requiring more or at least some money down and good credit and verifiable incomes, there is little need for a $350-$500 appraisal(in their minds). With 20% down, good credit and good income they are not going to want to order an expensive appraisal especially when they can pay $45 for a BPO, avm or at the most a desktop done by an appraiser.

It does not look good for this profession in the future ---at least for residential mortgage full appraisals.

 

[George Hatch]

Pardon me while I don my flame retardent suit.....


Tell me what it is the brokers are doing in these BPOs that appraisers can't do in an appraisal under USPAP. Or, if you prefer, what must we do that the brokers aren't doing in those BPOs?


There are a few things, but those few things are not time consuming. The real problem here is that there are a lot more people who are willing to do these assignments than there are assignments to go around. That's why the fees are so low.

You guys should stop kidding yourselves. If you really wanted to you could go out and do $30 appraisals that use a SOW similar to what the brokers do. You just wouldn't be using the Fannie 1004 or 2055 forms.

You could probably do a BPO-style SOW faster than the brokers do them. You just don't want to do those assignments because by the time its all over the money isn't worth it to you. The brokers will do the work for less money than you and you don't want to compete for this business.

You didn't care so much when there were plenty of the better paying full-fee assignments to go around. But now that the market has tightened up and you're looking for other sources of work you cast your eyes on the scut work these brokers are doing.

I'm thinking that the lenders would rather pay an appraiser $75 for appraisals that use a BPO-style SOW than pay a broker $30 for a BPO. I'm thinking that if appraisers had access to blocks of 30 of those assignments at a time they could probably work the economy of scale thing to their advantage and earn enough to get by.

I think that Zaio's integrated software and hotload functions would make a great BPO buster so long as an appraiser could use it to tag and export their MLS listings and photos into the report.

But you would have to want the business badly enough to go out and compete for it. You would have to be willing to go to the trouble of building "safe" reporting templates, setting up the export functions for your database and photos, maybe buying a tablet and some voice recognition software so you would "write" the front half of the report while onsite, and be willing to accept and complete 20 or 30 of these things in a week.

It would be a very different mode of working for most of us. But some of us could probably make it worth our while if we wanted to go to the effort to do it.

 

[George Hatch]

BTW,

That BPO form shown in Bert's post above could easily be converted to an SR-2 compliant appraisal report with a couple of changes in the verbiage and the addition of a generally boilerplated addendum with assumptions and limiting conditions. As long as you knew exactly what those assumptions and limitations were you could add or modify extraordinary assumptions or hypotheticals or change other disclosures on a case-by-case basis.

I'd never use MS Word to do the report, though.

 

[SANDY]

GEORGE:

I have the greatest respect for you and your knowledge. Here is my problem with your post. I have strong doubts that given the requirements that we are subject to- what would/are our peers do in any given situation and the uncertain definition of what a credible appraisal is or is not given any particular sow--I find it difficult to accept that this bullet-proof USPAP compliant product could be performed by appraisers with any certainty that they wouldn't be busted eventually. It's risky enough performing full or drive-by appraisals for a decent fee let alone performing these so-called BPO type appraisals for $45 or $75. I do not agree that a bullet-proof USPAP compliant product can be developed and even it it could be developed, the risk associated with providing it would not compute weighed against the fee.

PS-Stone and I have gone round and round on this before and I have much respect for those that may disagree with my position.

 

[xmtraterbcra]

GEORGE:

I have the greatest respect for you and your knowledge. Here is my problem with your post. I have strong doubts that given the requirements that we are subject to- what would/are our peers do in any given situation and the uncertain definition of what a credible appraisal is or is not given any particular sow--I find it difficult to accept that this bullet-proof USPAP compliant product could be performed by appraisers with any certainty that they wouldn't be busted eventually. It's risky enough performing full or drive-by appraisals for a decent fee let alone performing these so-called BPO type appraisals for $45 or $75. I do not agree that a bullet-proof USPAP compliant product can be developed and even it it could be developed, the risk associated with providing it would not compute weighed against the fee.

PS-Stone and I have gone round and round on this before and I have much respect for those that may disagree with my position.

I agree 100%. It is difficult survive on $350/appraisal doing USPAP compliant appraisals in the SF Bay Area. Although, if you cut a few corners by, say, omitting all explanations of adjustments or in fact simply not doing adjustments, avoiding plans, etc., etc., you can do very well in good times. But make a decent living doing USPAP compliant at $350? Not really.

Bert Craytor, SRA