Broker Price Opinions in Nevada

[mbrunson]

Greetings all.

I am an independent appraiser in Nevada. The Nevada Division of Real Estate (NRED) has recently convened a BPO Task Force to consider our current Administrative Code. This was brought about by a position paper issued by the NRED last December that is attached to this post. Please take a moment and read the official NV position before continuing. For those that do not readily recall, Nevada is a mandatory licensing state.

I and a small group of concerned appraisers are putting together a position paper that is due to the state by July 27, 2008. Here is what I need from you:

1. Provide or point me to any formal issuances from your state regarding BPO's.
2. Provide or point me to examples of BPO’s used in lending scenarios (please comply with all confidentiality laws). NV examples preferred.
3. Provide or point me to public documents regarding enforcement of your state laws regarding BPO’s used as appraisals.
4. Provide any relevant information regarding training or educational requirements for persons performing BPO’s
5. For Nevada Appraisers: The next Nevada Real Estate Commission BPO Task Force hearing is scheduled for August 6th. This is a public hearing and it would be great to have all appraisers at the hearing! Check the Nevada Real Estate Division website to confirm the agenda, schedule, time and location (about 3 days prior) under the 2008 Notice and Agenda of Public Meetings (Real Estate) area. ( http://www.red.state.nv.us/meetings.htm )
In compliance with NV Public Meeting Law – comments from the public will be alowed. A brief statement (free of emotion, but full of facts) from professional appraisers would be great. If you cannot attend, feel free to send your statement and someone will read it into the record.

I know this is an emotionally charged topic. Feel free to respond to this post with any manner of rant. However, I would like you to consider contacting me directly at mike@ascentnv.com if you have information, examples or suggestions relating to the points listed above. Please include "NV BPO" in the subject line of any emails. Any assistance you can provide would be greatly appreciated. Our goal is to protect the integrity of the appraisal profession, the real estate sales profession and the general public. Thank you in advance for your assistance.

SDG

Mike in Nevada

 

[xmtraterbcra]

My opinion based on information obtained form various real estate, mortgage and appraiser forums, as well as calling the California OREA, is:

1. Realtors do BPOs largely to get listings, often for very low fees. Appraisers can't compete at this level, nor should they try.

2. Comparing BPOs to USPAP compliant appraisals is comparing [rotten] oranges to [hopefully red delicious] apples. Of course lenders would rather have appraisers do BPOs than realtors - because they could do a lot more with them. Unfortunately, BPOs are not USPAP compliant, if used to estimate market value.

3. According to an official I talked to at the California OREA, appraisers are not supposed to do BPOs! - These are to be done only by licensed real estate brokers. The only exception would be appraisers, who are licensed real estate brokers, doing BPOs for the stated purpose of pricing REOs or other real estate. In the latter case, the appraiser should have a written order confirming the restricted use of the BPO (to be on the safe side - if it is not already a legal requirement, such as is the case in the state of Michigan).

4. All appraisers can do is make sure that BPOs are put in their proper place. In this regard, I've read and heard from numerous sources that lenders are using BPOs illegally as second appraisals and for HELOCs (legality questionable).

Bert Craytor, SRA
Certified General Appraiser
California Real Estate Broker

 

[JRS at OBX]

Email sent. Good luck!

 

[Elliott]

Mike posted a pdf that said,

When is performing a BPO against the law?
When a real estate broker/salesperson prepares a BPO for any reason other than listing and
selling a property and receives compensation they have violated Nevada Revised Statue​

645C.

ROFL. So the RE agency thinks there haven't been a zillion BPOs done in the last 3 years?
And they think the BPOers didn't get a check? And how many 'convictions' can they point
to 'enforcing' their position? USPAP was written to constrain appraisers for the benefit of
lenders and realtors.

This is also a Marbury v. Madison sort of debate. The realtors have their rules and of course
the appraiser board have their rules, so who triumphs? The bigger gorilla does, the one with
more lobbyists.

Here's the decision of the king of Oregon real estate agents:

http://www.oregon.gov/REA/EDU/docs/OREN-J_12-07.pdf

See, more votes and dollars always wins.

 

[Pamela Crowley (Florida)]

Seriously, ALL appraisers should be ready and willing to help mbrunson get Nevada to be the first State to take this issue where it needs to go. Everybody here that has ANYTHING that could help, please do get it to mbrunson ASAP.

IMO, if NOBODY other than a licensed real estate appraiser could be paid for a value opinion on real estate, the BPO issue would become non-existent.

Would somebody please post some of the real estate agent forum links that have BPO discussion threads that would tell it like it really is? How about some that show these agents are sending out high school kids to do these.

 

[robert higgins]

Agents online, whole forum on REO, BPO, and foreclosures. I have not read it in a few weeks, but there is a whole lotta stuff on BPO business and fees paid by AMC's and BPO-MC's, hope it helps.
http://www.agentsonline.net/forums/ubbthreads.php/forums/8/1/BPO_REO_Foreclosures.html

Check this thread:MARKET CONSULTATION for XXXXXX

http://www.agentsonline.net/forums/...e_MARKET_CONSULTATION_for_XXX.html#Post236575

 

[Elliott]

Robert,
So these are comments made by realtors just doing BPOs for the hope they will
get a listing.....

"Can't legally carry "heat" here in Ca so I've always got my pepper spray. Attached to my keys so its in my hands at all times. If I have an interior BPO and am going in alone, I make sure I'm on the phone with someone who knows where I am and what I'm doing there such as my husband or the listing agent. The agents are always happy to assist me as they are familiar with the property & circumstances. A bluetooth makes talking and snapping photos at the same time much easier =)

"#74 When you get home from a day of 10 property inspections, upload the photos immediately. Nothing worse than your daughter holding the camera and asking,"Daddy, what does FORMAT mean".

"Make a spreadsheet in Excel with sums that will easily update for ever new year. I use this reference to quickly determine the age of the home.

"Yr. Age
1971 -36
1970 -37
1969 -38
1968 -39
1967 -40
1966 -41
1965 -42
1964 -43
1963 -44
1962 -45
1961 -46
1960 -47

"After doing all those BPOs, you get that REO listing only to have your beautiful sign tagged by some kid's fat maker. After installing my signs I smooth on a thin layer of Vasoline to both sides, using my always available vinyl gloves. Serves two purposes, keeps my signs relatively clear from graffitti, and I usually find the Magic Marker nearby as it will no longer work. If the sign gets to dusty, or bug filled, I replace and bring home and wash with Dawn detergent. Remember to pick-up those dead markers

"My question to everyone is I would like other peoples opinions on how they figure land value and adjustments. Thisis always such a gray area - and my agents that work with me keep asking me to explain- but I am a doer not a teacher. Any insights on how to teach this skill without pulling my hair out trying to make sure they understand.

"#25 - set up a dual or triple monitor display or invest in a large (32") monitor - this will allow you to have multiple full screen windows open at the same time - works great when transfering info from MLS, tax records, etc.. into your BPO form - In my opinion, this is one of the best time saving techniques around - I couldn't imagine having to toggle through your different windows to gather and input information


"28 On those 15 BPO days and you can't remember the number of bedrooms or bathrooms, especially in old houses sometimes chopped into duplexes, take pictures of your fingers. I shoot a few rooms and then hold up 2 or 3 fingers to indicated 2 or 3 bedrooms. I use left hand for bedrooms and right hand for bathrooms. Easy to tell when I get home and sort through to upload. Requires no paper and digital photos are cheap.

"29 Stock Phrases. Spend a little time typing up a list of stock phrases. I use Excel. Tape the list next to your monitor. Can make it quick to enter comments when your brain is dead at the end of the day.

"i also have a "cheat-sheet" of common "BPO blubs" that i use to describe neighborhood areas, market conditions or my "this is not an inspection report... blablabla" that i copy and paste into the proper sections. it saves lots of time!

"Just be careful... because it'll also enter numbers that you don't want there. For example: you've previously entered 103 DOM, and now want to enter 10 DOM. It'll add that 3 at the end.


Yeah, I'm sure these are just realtors lookin' for a listing and don't get a check to
do a BPOer.

 

[xmtraterbcra]

... IMO, if NOBODY other than a licensed real estate appraiser could be paid for a value opinion on real estate, the BPO issue would become non-existent. ....

As far as I know, this is already the case in California, Michigan and I guess Nevada. It's just a question of reporting violations and enforcement.

This really shouldn't be an issue - and as far as I can tell is only an issue only because:

1. Some appraisers seem to think that BPOs (Broker Price Opinions) are a kind of appraisal. They are not. They are an opinion of listing price. In fact, there is a download from the Nevada Association of Realtors that states just that!

http://preview.tinyurl.com/6xcxpn

2. Apparently some lenders are using BPOs illegally for estimates of market value. (Which is an enforcement issue).


Bert Craytor, SRA
Certified General Appraiser
California Licensed Real Estate Broker

 

[robert higgins]

Elliott,
BPO Price Declaration:
Got an email from a Bankruptcy Attorney today and here's what it says:

On 06/04/08, you completed the attached Broker's Price Opinion on behalf of BPO COMPANY. Our office has been asked by BPO COMPANY to file a motion for relief in a bankruptcy matter filed by the above-referenced Debtor. However, in order to do so, the court requires a written declaration regarding the valuation of the property. This is a standard practice in the U.S. Bankruptcy Court, and it is therefore highly unlikely that you would actually ever be called upon to testify in court.

The email was also addressed to a BPO COMPANY person, but I havent heard from them about this, should I comply or call the BPO COMPANY to ask if I should do this or not? By the way, for privacy, the BPO COMPANY is my generic name for the real company that I perfom BPOS for.

 

[Elliott]

Bert said, 1. Some appraisers seem to think that BPOs (Broker Price Opinions) are a kind of appraisal. They are not. They are an opinion of listing price. In fact, there is a download from the Nevada Association of Realtors that states just that!

Makes no difference to me who decides to put their head in the sand.

(ostriches that are threatened but unable to run away may fall to the ground and stretch out their necks in an attempt to become less visible. The coloring of an ostrich's neck is similar to sand and could give the illusion that the neck and head have been completely buried. "Don't hide your head in the sand," is an old saying that means don't ignore a problem thinking that it will go away.[42])

BPOers are undoubtedly more advanced than us fee appraisers. I've never
done so many inspections in a day that I had to hold up 2 or 3 fingers on my
right or left hand to signify bedroom and bathroom count. I'd be more inclined
to hold up a single digit, depending, either stable or waving it side to side.
"linger longer"