Are BPOs used for lending purposes required to be USPAP compliant?

[Pamela Crowley (Florida)]

Great! I think I'll go list a few properties and get paid a fee for services rendered...

I just won't call it a 'commission'.

 

[Couch Potato]

Thanks Frank. I searched for it, but missed it. I guess it is better than nothing. So they have to follow USPAP for "appraisals," but not "opinions of value."

 

[Pamela Crowley (Florida)]

Looks like an appraisal, used like an appraisal, but as long as it's not called an appraisal, it's OK.

Licensing appraisers was a joke, right?

 

[Kenneth Reynolds]

The section Frank quoted was 475.611. This section is for appraisers not for brokers and sales assoc. The statute outlines what might happen if an appraiser does not comply with USPAP and emphasizes that BPO's etc. are not appraisals.
But I still don't see where appraisals $250K and below can be done (other than FRT) by brokers who must comply with USPAP.
I guess it's just me but I would appreciate help understanding this once and for all.

USPAP applies to appraisers and not to RE agents is still the way I read it.
RE brokers provide price opinions and appraisers provide estimates of value. Part I of Chap 475 was written for the RE Brokers etc (475.001-475.5018) and Part II (475.610-475.631) was written for appraisers. Where does it say a broker can do an appraisal which must conform to USPAP?
I'm sure it's there and you folks a lot smarter than me are right but it would help me greatly to understand if someone would kindly point it out to me. Sorry to drag this out.

 

[Francois K. Gregoire]

The section Frank quoted was 475.611. This section is for appraisers not for brokers and sales assoc. The statute outlines what might happen if an appraiser does not comply with USPAP and emphasizes that BPO's etc. are not appraisals.
But I still don't see where appraisals $250K and below can be done (other than FRT) by brokers who must comply with USPAP.
I guess it's just me but I would appreciate help understanding this once and for all.

USPAP applies to appraisers and not to RE agents is still the way I read it.
RE brokers provide price opinions and appraisers provide estimates of value. Part I of Chap 475 was written for the RE Brokers etc (475.001-475.5018) and Part II (475.610-475.631) was written for appraisers. Where does it say a broker can do an appraisal which must conform to USPAP?
I'm sure it's there and you folks a lot smarter than me are right but it would help me greatly to understand if someone would kindly point it out to me. Sorry to drag this out.

Kenneth,

The part I quoted was 475.25 (1)(t). That's in Chapter 475 Part I.

Chapter 475 Part I allows real estate licensees to complete appraisals for any type of property and any range of value, regardless of complexity. The rub is that only individuals licensed or certified under the provisions of Chapter 475 Part II may complete appraisals for Federally Related Transactions.

FRTs are determined by Title XI of FIRREA, not by the states. Mortgage loans below the deminimus are not FRTs. According to rules promulgated by the Federal Banking Agencies, appraisals are not needed for these transactions; "evaluations" are specifically allowed. For those of you concerned about the use of something other than "an appraisal" being used for mortgage loan transactions, your beef is with the US Congress (for establishing the deminimus) and the Federal Banking Agencies (for creating the loophole rules allowing "evaluations").

 

[Pamela Crowley (Florida)]

How did the mandatory states write their statutes to make BPOs and/or non-appraiser-licensed people doing real estate valuations illegal?

The best solution would be a State Statute that nobody other than a FL State licensed appraiser can be paid for a real estate valuation. Real estate agents and brokers can do their CMAs or BPOs all day long, but cannot be paid for them because they can only be paid for real estate transactions where they were the listing or selling agent.

 

[nauthead]

Simple soultion: If RE agents can appraise, value or whatever you wish to call it, appraisers should be able to act as real estate agents. If that idea were ever put up for consideration I'm sure the NAR and FAR would scream bloody murder. Either make it against the rules for RE agents to cross over into the world of appraising or allow the appraisers to cross over into the world of selling real estate.

 

[Kenneth Reynolds]

Thanks Frank. Still a little fuzzy on how USPAP applies to RE brokers/sales assoc, but I have a better grasp. I'm still blown away that appraisals for any amount or complexity can be completed by other than certified/licensed appraisers unless congress or bank agencies say different.
To illustrate my learning curve, I once thought that any loan made by a bank or lender whose funds were insured by the FDIC were FRTs.
So thanks again.
Oh, one more question concerning the deminimus amount. How is it that they can determine $250k in advance of knowing what the estimate of value is? I've always thought it was important to go into the appriasal assignment with no preconceived notions or bias. You know, like not assigning fees to property values etc. Can I burden someone for some light on this too? Thanks for all you do.

 

[Francois K. Gregoire]

How did the mandatory states write their statutes to make BPOs and/or non-appraiser-licensed people doing real estate valuations illegal?

The best solution would be a State Statute that nobody other than a FL State licensed appraiser can be paid for a real estate valuation. Real estate agents and brokers can do their CMAs or BPOs all day long, but cannot be paid for them because they can only be paid for real estate transactions where they were the listing or selling agent.

Why?

Personally, it does not matter a whit if non-licenced or non-certified appraisers produce valuation products. My view is influenced by the fact that I was an appraiser long before licensing and certification. Back then, it was possible to differentiate yourself from folks with the same license (broker or sales associate) and provide a service with a level of expertise and skill others could not. That is still possible. Restricting competition to ensure work for appraisers will not benefit the profession.

If someone with an appraiser ticket wants to get in on the BPO work, it's not too tough to get a license as a real estate sales associate.

 

[J in Florida]

If someone with an appraiser ticket wants to get in on the BPO work, it's not too tough to get a license as a real estate sales associate.

I'm running a little slow this morning, but if someone with an appraiser ticket and a real estate sales or broker ticket does BPO work, evaluations, whateverthehell we want to call them, must these be completed in compliance with USPAP or no?

It's my understanding that they do. I could be wrong though, it happened before once. ONCE (LOL).