BPO's And Cma's What Standard & Condxs

[bradellis]

Steve,

Do not jump down my throat, because I happen to agree with you on this one, BUT

I think the crux here that the Realtors are haning ther hats on is the concept of price vs. value. BPO= broker PRICE opinion.

Here is my problem- we sold for price (the most probable price). ASB says price, once stated, is a fact. How can a fact be an opinion?

Austin,

There are really lots of very good reasons to use BPOs, and I think the biggest one is that I can buy them for a great deal less than it costs me for similar work from an appraiser. This is a matter of economics. I just ordered over a hndred of them to use as a check see on an AVM product I was assessing.

I also read the REO ones daily. UNFORTUNATELY the brokers get the necessary repairs right a lot more often than do appraisers. OF COURSE we know that they are going to be self serving if they are the listing broker, but it does serve to inject more data into the process. That is really what I fnd to be most useful- sometimes I can get anotehr comp out of them to marry with the appraisal data.

Don,

Why would they do them? Becuase most broekrs end up with lots of tiem on their hands when they are not making money. When I recruited brokers it was easy to talk them into leasing a new Mercedes based upon the regular fee they would get by doing 1-2 week. May be sad but it is true. I do agree that the real good brokers, however, do not need or even want this dough.

Finally, to our poodle poster- BOTH my dogs are poodles!

Brad

 

[TEL2002]

Brad,

You said

UNFORTUNATELY the brokers get the necessary repairs right a lot more often than do appraisers.

Out of curiosity...
1. Are the appraisers usually high or low?
2. By how much do they 'miss it'?
3. In general, are appraisers saying too many things need to be repaired or are they missing a lot of needed repairs?
4. While in an office at a distance, how do you determine the agent is correct and the appraiser is not? (I do a lot of REO work, and what I typically see is the majority of the listed repairs are never repaired. After the trash out the house is sold as-is.)
5. Who orders the specific repairs and pays for them?
6. Do some brokers 'make sure' the actual repair expenses meet their previously determined costs?

Usually appraisers will calculate repair expense based upon contractors doing the work, not some person hiring a jack of all trades/master of none for $8.00 an hour. The appraiser is making the assumption the plumbing is repaired by a plumber, etc.

I met a 'trash out' guy at an REO, he was there so he could tell the broker what he was going to charge and what the costs of repair were going to be. He told me he also wrote the BPO's for the guy. No he was not an agent. Sorta like some appraisers inspecting the property when they did not. Guess the ethics problems cover all professions.

I do believe appraisers need a report/product that would be USPAP compliant and have less liability, etc.

 

[bradellis]

TE,

Your questions:

"Out of curiosity...
1. Are the appraisers usually high or low?
2. By how much do they 'miss it'?
3. In general, are appraisers saying too many things need to be repaired or are they missing a lot of needed repairs?
4. While in an office at a distance, how do you determine the agent is correct and the appraiser is not? (I do a lot of REO work, and what I typically see is the majority of the listed repairs are never repaired. After the trash out the house is sold as-is.)
5. Who orders the specific repairs and pays for them?
6. Do some brokers 'make sure' the actual repair expenses meet their previously determined costs?"

1. Appraisers are typically higher. Most of the time- not all.
2. Never measured this- sorry- I probably should.
3. Typically the appraisers are missing repairs not citing too many.
4. I can determine this because the brokers usually provide many many more interior photos than does the appraiser. And yes, we sure do understand the broker will call for many things that may not actually be necessary- but that is all disclosed in the pix, most of the time. And yes, most are sold "as is" after trash out. Reason: most of these beauties are in terrible condition and the bank takes a big risk if they spedn a lot and do not get it back. Just easier to take the loss up front.
5. Usually asset managers order the repairs.
6. Occasionally.

Hope that helps,

Brad

 

[Ultraviolet]

In Arizona it isn't legal for agents/brokers to charge a fee for a BPO - PERIOD !!

BPOs can be done by agents/brokers ONLY for the purpose of procuring a listing and NO FEE can be charged!!!!!! Actually, the "for the purposes of procuring a listing" is part of the Realtor Code of Ethics. The "no fee" is an AZ statute.

A BPO is considered an appraisal here and all appraisal services in AZ must be provided by a licensed/certified appraiser. If appraisers want to do them for free, they're welcome to. Sales agents CANNOT provide BPOs for fee or free for valuation purposes - PERIOD !!!

I knew this already, but yesterday I attended a new REALTOR@ orientation. I was one of two appraisers there (about 100 people) and the instructor openly encouraged appraisers to turn in any agents who are illegally performing BPOs. The instructor (not an appraiser) said that not only is it illegal, it is unfair practice against other members (appraisers) and an ethics violation should be filed if the agent is a REALTOR@.

Now if these laws/rules could just be enforced ...

 

[Bob Ipock]

Rae,

Under what state statute or board rule is it unlawful to charge for a BPO????? State law, appraisal board rules, real estate board rules or other?????


Also, can you get a source for the NAR position you quoted. I find that VERY hard to believe!

No trying to start a fuss....just would like sources if you have them.

 

[Ultraviolet]

Bob,

I think my post was a bit confusing and I apologize. The information is specific to Arizona, which designates all opinions of value as appraisals, and all appraisals must be performed by a licensed/certified appraiser.

I'll research the appropriate sources and post them for you.

EDIT:

AZ Revised Statute - 32-3601. Definitions

In this chapter, unless the context otherwise requires:

1. "Appraisal" or "real estate appraisal" means a statement independently and impartially prepared by an individual setting forth an opinion as to the market value of real property as of a specific date and supported by the presentation and analysis of relevant market information.

32-3603. License or certificate use; exception

A. All real estate appraisals and appraisal reviews performed in this state shall be performed only by individuals licensed or certified in accordance with the requirements of this chapter. No person, other than a state licensed or state certified appraiser, may assume or use that title or any title, designation or abbreviation likely to create the impression of licensure or certification as an appraiser by this state.

B. No person other than a state licensed or state certified appraiser may receive a fee for a real estate appraisal or an appraisal review.


As far as the NAR Code of Ethics goes, Standard 11-1 outlines how a BPO must be done if it's for something other than procuring a listing or making an offer. In AZ, anyone other than an appraiser cannot make these statements because by definition, it IS an appraisal.

What REALTOR@ is going to charge a fee to set a price, even before they take the listing? After they take the listing any formal opinion of VALUE (not price) is considered an appraisal, which they are not licensed to provide.

Does this answer your questions, or am I misinformed?

Here's CA's definition of "appraisal". Very different from AZ.

http://www.dre.ca.gov/relaw_pdf/Excerpts.pdf

 

[Otis Key]

Bob, NM has a similar real estate appraisers law. Everytime someone is caught providing a BPO or CMA for a fee, they are brought up before not only the state real estate board but also the local board. Tends to discourage them from doing those.

 

[Bob Ipock]

Rae,


Thanks so much...that is very clear.

The Code of Ethics deal would only be an issue in states that do not allow BPO's .

That was what I was looking for.

That won't work here in NC since the NCAR was able to get the exception for BPO's written in to the appraisal statute.

Thanks again.


Bob

 

[Ultraviolet]

You're welcome, Bob. Sorry for the confusion.

I included CA's statutes because they were easy to find. It took me a while to find NC, which is similar to CA.

Slow day in the desert ... :lol: Just got an order in, though, so back to work!!!

 

[Bob Ipock]

http://www.ncrec.state.nc.us/bulletin/fall...ice_opinion.htm