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BPO's

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Joe: i AGREE WITH YOU 100%. This is a major overhead income for Realtors and a fast $50.00 to 150.00 in the pocket.

BPOs gained acceptance when Fannie and Freddie started a BPO network through the Banking industry to circumvent the appraisal. They now get a BPO on a sale or loan so the can pocket the difference and not in the lenders mind violate RESPA.
NAR is pushing for BPOs to be appraisals in many states and have won in states such as ILL, Ohio< Mich. to name a few. If NAR were looking out for the apprasier interest they would not do it and also change their ethics in Oct of 2000, that Realtors don't have to abide by USPAP.

William Sentner
President
American Guild of Appraisers OPEIU AFL-CIO
RESASINC@aol.com
 
Caterina

I work for investors that buy loan packages on the secondary market. So to be specific about crime and such is not the important factor. As in most business decisions it is all about time and money. BPOs are ordered for many reasons and have justified their cost to the company in many ways.

I don’t want to get into what is good or bad about them here as we were discussing whether an appraiser/ Realtor could do them. I was hoping to pin Frank down for an answer. But he is a better politician that that. However it sounds like you can do a BPO if you add the certification and limiting conditions as an appraiser. And again there may other USPAP compliance issues to consider. In effect this would become a drive by with 3 comps and 3 listings for $50-$80.
That would leave it up to the individual Appraiser / Realtor if it worth the hassle
Click to expand...

Dale,

Out of curiosity, and to help settle a disagreement, why would you ask an appraiser to complete a BPO? Would it be because "they just happen to have the data", "their identity as an appraiser, appraisal expertise, and ethical reputation" or some other reason?
 
The key to Dale's response is the fee. An appraiser can complete a 2055 exterior view report with three sales (or more) and three listings (or more), provide the same (or more) info than any realtor, with better informed data, more resources, more expertise, experience, etc. However the appraiser wants to be paid for their time and $50 does not pay for the resources, equipment, training, expertise, etc that an appraiser incurs for offering an opinion of value. Thank goodness, Arizona Real Estate Department says they are finally going to enforce Arizona law that has been in effect for over ten years. Maybe the orders for REOs that had loans based on BPOs will slow down some day in the future! Lenders that "save" money by ordering BPOs lose money in the thousands with loans for more than the actual property value.
 
Uncle Sam requires "evaluations" for deals that do not require appraisals, and has published a list of minimum requirements for an evaluation. A BPO could be used as an evaluation by lenders. As someone else mentioned, if a bank clerk can do them, why not a real estate agent? The fight is not with real estate agents, but with Uncle Sam. Appraisals are not needed for transactions less than $250,000 or transactions less than $1 million on business properties (essentially owner-occupied) or renewals of lines of credit when there is no new money disbursed.
 
Joe: i AGREE WITH YOU 100%. This is a major overhead income for Realtors and a fast $50.00 to 150.00 in the pocket.

BPOs gained acceptance when Fannie and Freddie started a BPO network through the Banking industry to circumvent the appraisal. They now get a BPO on a sale or loan so the can pocket the difference and not in the lenders mind violate RESPA.
NAR is pushing for BPOs to be appraisals in many states and have won in states such as ILL, Ohio< Mich. to name a few. If NAR were looking out for the apprasier interest they would not do it and also change their ethics in Oct of 2000, that Realtors don't have to abide by USPAP.

William Sentner
President
American Guild of Appraisers OPEIU AFL-CIO
RESASINC@aol.com
Click to expand...

Hi Bill,

How about you quit tossing rocks for a minute and read this:

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NAR POSITION: NAR supports a licensed or certified appraisal for all federally-related transactions. The Association's policy of supporting a threshold level of $100,000 for residential loans and a $250,000 level for commercial loans has been in place for some time. NAR firmly believes that using appraisals leads to better loan underwriting.
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Then, read the entire Policy Statement.

CLICK HERE!!

Next, produce some evidence the National Association of REALTORS (not a state association) is pushing state legislation.

Next, tell us what your efforts have been with the National Association of REALTORS regarding USPAP. Has there been any action other than sniping? Your assaults do little to promote the cooperation you so often tout as one of the aims of your organization.

Demonizing is a petty tactic. Wouldn't you agree?
 
Dale,

I am well aware of the whys and wherefores of BPOs- our panel performs thousands every month- always for portfolio valuations or REO processes. We do not do them for funding purposes and, while I am not saying they are never done for these purposes, I still have not seen one done for this purpose.

I do not, however, believe that brokers should be immune from fair housing/fair lending laws when doing these- and I do not believe they are shielded. Frankly, I think they all need more training on this.

What you are probably looking for is an agent's best estimate of probable selling price and you want it down and dirty. I'm guessing that part of this- probably a big part- is price. Turn them around in 2-3 days so you can make your business decision.

But, be careful. The quality of these things often leaves a lot to be desired.

Brad Ellis, IFA,RAA
 
Frank,

Actually, I am having a LOT of fun with this. As I recall, you asked me for 3 things the feds do well and I gave them to you. You did not ask for 3 things they do well as regards appraiser licensing. Sorry if you do not like my examples, but it is still true. The feds can and do some things well.

I guess the bigger question here is whether or not the states do it well enough. On that, I feel the answer is very clear- they do not. I AM aware that this is a blanket statement, but I'll stand by my earlier comment. Pretty much every state board has someone who knows little of USPAP. You have public members, realtors, bankers, lawyers and all sorts of folks who mostly have never read the document. I've met some of them.

You say that it is the state law that matters more. Well, that is true only as regards either supplemental standards issued by a state OR if the state has written its own ethics laws. HOWEVER, since most, if not all, states have incorporated USPAP by reference into their laws, I would submit that most sanctions are based upon USPAP and not upon state law that is somehow different. Yes, technically, if the state bases its law upon USPAP incorporation, then the offending appraiser will have violated state law- but let's not split hairs here- you know I have none left!

The simple fact here- and it is borne out by plenty of anecdotal evidence- is that the states apply USPAP in an uneven fashion and in many instances, they do not understand USPAP at anywhere near an adequate level.

Licensing by the states is BROKEN. I guess the question now is: Do we simply go on having legitimate work sanctioned by a state who does not understand USPAP (even as incorporated into their own laws)? I say NO. Not only does this treat the ethical appraiser unfairly, it takes away precious resources needed to catch the truly bad guys.

I believe that federal licensing would work better. Note that I did not say perfectly, just better.

Byt the way, I heard from CA yesterday. They confirm they have everything they need from me and will be looking over my file early next week. Hopefully, by mid-week, they will send me a letter to send in the rest of my money for the issuance of the license. Then it will take another 30 days (?), bringing the grand total to three months! Back in IL, they process 4400 +/- renewals in the same period. Efficiency in state government! (Actually the CA folks have been nice and I know they are understaffed- anothr reason supporting my concept?).

I will not admit being wrong on this and understand we have differing views. But, I'll still buy the Krispy Kremes since I know you do NOT eat them- you are waaaay too skinny!

Later, Gator,

Brad Ellis, IFA,RAA
 
Bill Sentner,

I noted that you said that in IL NAR is trying to get a BPO classsified as an appraisal. Can you eleborate on this- I have not heard anything like this and would like some facts.

Please explain. In IL, BPOs have not been called appraisals since the inception of licensing. I tried to get that changed in the first re-write so that al would have to be appropriately licensed, but failed.

So, I'm very interested in this and want to know what proposal, law or admin rule covers it.

Brad Ellis, IFA,RAA
 
Frank

Good question on why we would want an appraiser to do BPO.
Actually we do not want an appraiser to do a BPO. (we already have an appraisal with each file) The idea of getting a BPO is to find out what a Realtor can sell a certain property for in a specific time frame. Additionally the supporting data is very helpfull in believing what they say or determining if they are total idiots. Our purpose is to obtain as much information about the property (the appraisal) the market (AVM, Tax Records) and the salabality (Realtor) to help us make decisions.

For those bashing Realtors How can you not consider active listings?
 
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