BPO's in Indiana

[AppraisalTwin32]

Hello Fellow Hoosiers,

I wanted to start a thread concerning BPO's in Indiana. I recently had a request by a client to perform a BPO. I politely declined, however it got me to thinking...are there appraisers in Indiana performing these? Why else would they ask me unless they were under the impression that appraisers could perform BPO's? It is my understanding that in Indiana appraisers were not allowed to perform BPO's (as we cannot remove our "appraiser hats" as in other states). Is this not the case? I've seen similar reduced SOW appraisal products out there as well. Are these effective? Are they allowed under Indy law/appraisal rules?

Please understand, I AM NOT JUDGING those who do prepare BPO work for their clients. If you do, great! I hold the firm belief that each man or woman has the right to run their firm however they see fit. If you prepare such work, please don't hesitate to inform those of us who do not on what is required, whether you find it to be profitable, how detailed you can make a BPO, etc. As I said, my firm is no better than any other; and the work I choose to do is simply that...my choice. These threads often turn into "I'm a better appraiser because..." and that is not my intention. I truly just wanted to know (a) if I am correct in my understanding that Certified Appraisers cannot perform BPO work in Indiana, (b) for those of you who do provide such products to your clients; do you find it accurate enough to be considered an accurate "appraisal" product, (c) any other thoughts anyone may have on BPO products and how appraisers can, or if we should, compete with them...

Please, no judgement. If you do perform BPO's, I'd love to hear from you. I don't offer such products, but that is a business choice of mine. Doesn't make me right. Doesn't make my business better. Doesn't make me a better or more upstanding appraiser. Could be the 100% wrong business choice, and your BPO may be better than any full appraisal I write. I don't know everything. That's why I'm asking..to get opposing views/ideas on the topic and start a conversation. Thanks to anyone who chimes in!

 

[Thomas Fiehler]

I don't do them, but in Ohio they must be done by Brokers. If you have a RE licnese, I'd check with your apprasial board for their input.

 

[AppraisalTwin32]

I appreciate the response. Our firm does not offer BPO's based on the facts that (a) I believe that as a Certified Appraiser, no matter how many disclaimers one may place in a BPO; an opinion of value was provided and it better be accurate and well supported, and (b) that as a CR, it is not even legal for me to do so in the State (this is MY interpretation). I could be wrong on both of these counts, and I was interested in the discussion that may arise.

 

[Major Major]

Never have, and never been asked.

 

[Roy Courtney]

Hi,

My name is XXXX with XXXX-zzz Asset Solutions. We have an Exterior BPO available at the address of zzz zzz Creek Dr.
XXXXXXX, TX 75XXX. This is a BPO that we are looking to get completed for $50 by 12/28. Would you be interested in this order? If so, we can assign this order to you. If you need other terms, can you please advise what fee and turnaround time you would require?

Thank you,

XXXX XXXXXXX

Come on....$50.00? Who does this type of work?

 

[AppraisalTwin32]

That's what surprised me. That the client would even ask...that's what led to my intrigue. I didn't know if this was some new trend in Indiana that I hadn't been aware of or what. Obviously they simply confused me with a broker (as I do hold a broker's license as well). I thought it might lead to an interesting discussion about reduced SOW work and its usefulness in valuation (as I know many REO Asset Managers rely on them quite heavily); but at this point I think I'm just stretching for things to discuss

 

[AppraisalTwin32]

Well at least I'm not the only one! That's what I was wondering. For them to even offer would lead me to believe that someone (if not many) are actually doing them. Then I thought that it wasn't even legal in Indy if my memory serves me which made me doubly interested Just interesting. Thanks for the response!

 

[Mark K]

You CAN perform BPOs if you want and you have a broker license. I also have a broker's license and years ago performed some BPOs for a good client; I haven't done any in about 10 years. My client paid the same for the BPO as for an appraisal; they just wanted the BPO format in some instances.

One minor catch, however, is that BPO's ARE appraisals and technically need to comply with USPAP. Doesn't matter if an appraiser or broker does the BPO, IN law says they are appraisals and need to comply. Most don't but brokers don't seem to care and nobody has pushed it yet. Indiana license law allows brokers to perform appraisals for a fee but, again, the reports have to comply with USPAP.

If a broker prepares a CMA in conjunction with a listing, its not an appraisal. If the same broker prepares a BPO and charges any fee, its now an appraisal and USPAP is in play.

I know a broker that does about 10-20 BPOs per week at $75 each. She's been doing these for years making a good living working 3-4 days a week. One page form, one drive-by photo, all on-line. She also knows that they are supposed to meet USPAP but none of them ever have.

 

[THZebra]

Brokers must follow USPAP

I see the original post on this subject is quite old, however all Indiana brokers should know a couple things. 1) In Indiana brokers can do all types of appraisals without restriction for any non-federally regulated transaction. The Broker license does NOT restrict as does the appraiser's license/certification. In other words the broker can perform an appraisal on 1 single fam house, shopping mall or a factory. 2) Brokers MUST follow USPAP. While the USPAP course is not required for broker's to take that is no excuse. They must follow it. Any broker performing appraisals would be well advised to take USPAP as an elective in their 16 hrs of con-ed.
I also hold a broker license and performed appraisals as a broker until the 1990's when appraisal licenses were "born".

I have not performed a BPO in about 20 years+-. I would turn down such an assignment. I am not certain the BPO follows USPAP. Just to say the BPO is "not an appraisal" does not necessarily allow it to not be considered as such by the RE commission or AB. My advise to Indiana appraisers and brokers (unless the commission or AB have said otherwise) would be to turn down BPO work and perform some type of actual appraisal on a form that is current and acceptable under USPAP.


Since Indiana Brokers can perform appraisals why not just do a 2055 Exterior or, if the client doesn't want an inspection do a desk top analysis?

Just my thoughts.

 

[Lee Lansford]

Can licensed appraisers in Indiana list and sell real estate (real property interests)?

If not, why not?