BPO's And Cma's What Standard & Condxs

[Bob Ipock]

Bob,.......I'm sure you did hear correctly

Ross,


I did not just hear this. I know the guy. He is an agent for one of the BIG real estate franchises. He just decided their was no use in taking CE every year and let his appraisal license lapse.

Very frequently, he does a BPO anfd I do an appraisal on the same property. He gets the listing and handles the REO until it sells.

 

[Fred]

Jim,

The BPO from XXXX Real Estate is summarily dismissed

Usually one has to go to court to get summary dismissal.

What's the difference between a BPO and an appraisal? Well, plenty. A BPO is not an opinion of market value,

Why not? "Opinion of value" sound to me like anytime anyone decides what somethng is worth. With a BPO, you even have the element of intended third-party reliance.

 

[Don Clark]

B) Steven,

In Virginia where Austin and I are located, only a state licensed or certified appraiser can do an appraisal. Specifically by law in Virginia, Brokers, real estate agents, and others can do an "Evaluation". They cannot alude to their work as being an appraisal. They generally do not use such words as "Market Value". It is usually an estimated list price or a sales price. And, most often they will give several options for list price..."as is", "as repaired", and "quick sale". By law real estate agents and brokers and others who do "Evaluations" that BPO's fall under can charge for their services

 

[Bob Ipock]

Don,


In NC, real este brokers may only perform a BPO (or a fee $$$$$$) ONLY if there is a reasonable expectation of aquiring a listing.

The problem is, we have hundreds or maybe thoussands of brokers doing these with no chance of getting a listing. The NCAB has no jurisdiction to walk into a real estate and ask to see the BPO files. If they did, some of this could be quicklyy stopped.

 

[Bob Ipock]

Read the CMA story (BPO's are considerd the came as a CMA)




http://ncappraisalboard.org/bulletins/Fall01.pdf

 

[Don Clark]

B) Bob,

See my modified post. Back in the days when my wife was a Million Dollar Club agent, and I was working with her, we had large national clients that we did REO work for. We did BPO's, hired contractors, inspected properties, had properties cleaned up, went to court on behalf of the client, listed and sold their REO properties. We generally only got paid when the listings sold. But, we had a lot of properties that we marketed. Why in the world most real estate agents would waste their time doing BPO's for $50 - $100.00 is beyond me. We made our money selling the properties, not through a BPO.

 

[Bob Ipock]

Why in the world most real estate agents would waste their time doing BPO's for $50 - $100.00 is beyond me. We made our money selling the properties, not through a BPO.



I would not think that MOST do, but I know 10 in my town that spend a large portion of their time doing them.

Yo know, sometimes a friend, realative or business partner of theirs may get a great deal on a REO based on their BPO.......it has and does happen.

 

[xm39hnu]

Originally posted by Steven Santora posted....
Jim,

The BPO from XXXX Real Estate is summarily dismissed

Usually one has to go to court to get summary dismissal.

Yep. But they did ask me to "judge" the two BPOs' quality.

What's the difference between a BPO and an appraisal? Well, plenty. A BPO is not an opinion of market value,

Why not? "Opinion of value" sound to me like anytime anyone decides what somethng is worth. With a BPO, you even have the element of intended third-party reliance.

In TN, at least, it's the same as Don Clark posted for VA: It's an opinion of selling price (kinda like an ERC appraisal) not an opinion of market value. And, as you know, "Price does not equal value."

 

[TEL2002]

Austin,

I think you should throw your questions to the actual agents doing the BPO's. (You know all of us appraisers are going to be biased .)

Here's a link to a real estate agent forum. It would be interesting to see what kind of answers you would get from a wide audience of agents/brokers.\

AgentsOnline.net

 

[Francois K. Gregoire]

The only published standards for BPOs or CMAs of which I am aware are those within the REALTORS Code of Ethics:

Article 11
The services which REALTORS® provide to their clients and customers shall conform to the standards of practice and competence which are reasonably expected in the specific real estate disciplines in which they engage; specifically, residential real estate brokerage, real property management, commercial and industrial real estate brokerage, real estate appraisal, real estate counseling, real estate syndication, real estate auction, and international real estate.

REALTORS® shall not undertake to provide specialized professional services concerning a type of property or service that is outside their field of competence unless they engage the assistance of one who is competent on such types of property or service, or unless the facts are fully disclosed to the client. Any persons engaged to provide such assistance shall be so identified to the client and their contribution to the assignment should be set forth. (Amended 1/95)


Standard of Practice 11-1

When REALTORS® prepare opinions of real property value or price, other than in pursuit of a listing or to assist a potential purchaser in formulating a purchase offer, such opinions shall include the following:

• 1. identification of the subject property
  
• 2. date prepared
  
• 3. defined value or price
  
• 4. limiting conditions, including statements of purpose(s) and intended user(s)
  
• 5. any present or contemplated interest, including the possibility of representing the seller/landlord or buyers/tenants
  
• 6. basis for the opinion, including applicable market data
  
• 7. if the opinion is not an appraisal, a statement to that effect
  

(Amended 1/01)

Admittedly, the 'standards' are minimal. In addition, there is no claim REALTORS involved in the preparation of such opinions of value or price adhere to these requirements. Failure to do so, however, is a violation of the REALTORS Code of Ethics.

In addition, please recognize real estate practitioners without REALTOR membership have no obligation to follow such standards.

There is at least one Federal District Court decision which struck down a state's attempts to regulate such products (Pennsylvania). The Court determined the use of non-appraisal products was permitted under Federal Agency rules (Banking Agency Rules) and the Federal acceptance pre-empts state laws restricting their use.

This was a big topic of discussion about 18 months ago.