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Downturn in Market Leads to Upturn in BPOs

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Riick

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Aug 14, 2007
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Certified Residential Appraiser
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Delaware
Well... the Realtors are pushing for their members to be able to do BPO's; the AI seems to be intent on reminding legislators that Appraisers exist for a purpose....

Inside the Beltway: Downturn in Market Leads to Upturn in BPOs

[FONT=Arial, Helvetica, sans-serif]Over the last year, there has been a tremendous increase in the use of broker’s price opinions (a.k.a. comparative market analysis, broker’s estimate of value, etc.) that are being performed by real estate brokers and salespeople, in lieu of appraisals. While BPOs were previously used for very limited purposes, they are now being used as valuation products in the finance arena, primarily for the review of distressed properties prior to short sales or foreclosure. They are also being used in areas previously unimagined several years ago, including segments of the commercial market[/FONT]


Balance of article is here: LINK

 

Workbox

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Mar 2, 2005
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Colorado
GO AI, GO AI, Go AI,............ but we told you so a long time ago. Now that your members are up a creek with your paddle. I wonder how you are doing to fix this. You fix this so it will not happen again. Your paddle will be returned, Oh heck you'll get the super deluxe carbon fiber NASA designed Paddle and my membership$$$.
 

Terrel L. Shields

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State
Arkansas
The NAR is on a path to absorb appraisers "back into the fold" so to speak. They would love to re-absorb AI and fence out any appraiser who is not a "Realtor". They want our money and more importantly, our loyalty...and I am cynical enough to think that eventually they will get it.
 

Mike Phillips

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Joined
Dec 16, 2004
Professional Status
Certified Residential Appraiser
State
Florida
GO AI, GO AI, Go AI,............ but we told you so a long time ago. Now that your members are up a creek with your paddle. I wonder how you are doing to fix this. You fix this so it will not happen again. Your paddle will be returned, Oh heck you'll get the super deluxe carbon fiber NASA designed Paddle and my membership$$$.

Safe bet no one really cared as long it was the "rezzie" guys/gals getting hosed.

"They are also being used in areas previously unimagined several years ago, including segments of the commercial market" probably got the MAIs' attention.
 

The Warrior Monk

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Mar 30, 2005
Professional Status
Certified General Appraiser
State
New York
Safe bet no one really cared as long it was the "rezzie" guys/gals getting hosed.

"They are also being used in areas previously unimagined several years ago, including segments of the commercial market" probably got the MAIs' attention.

The only thing worse than a residential BPO is a commercial BPO. A good commercial broker could likely do one that is actually worth something, but they sure as hell wouldn't waste their time. For the most part real estate brokers are clueless as to how to price commercial properties. I know firsthand...I've done some consulting on the matter.

FWIW, I'm a commercial trainee and couldn't care less about commercial BPOs. Commercial appraisers tend to have diversified client bases, and the commercial BPO thing is an utter nonissue. And that's not even addressing the fact that commercial lenders (as well as residential portfolio lenders) are a whole lot more sophisticated than "lenders" that sell their loans to the government (formerly known as GSEs:)).

I guess this is the monthly AI-bashing thread.:)
 

Workbox

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Certified Residential Appraiser
State
Colorado
No David, not AI bashing, I hope they do help us change the system.
 

bart nathan

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Jun 9, 2005
Professional Status
Certified Residential Appraiser
State
California
The best part about agents doing BPO's is they aren't really doing them. Their secretaries and admin staff are doing them. I have seen adds in craigslist and a non agent at a inspection doing a BPO.
 

panappr

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Dec 5, 2007
Professional Status
Certified Residential Appraiser
State
California
The best part about agents doing BPO's is they aren't really doing them. Their secretaries and admin staff are doing them. I have seen adds in craigslist and a non agent at a inspection doing a BPO.
What's worse, I have befriended a lot of RE agents over the years, and get to watch first hand how they how they do these, and yes they do have their assistants out doing all the inspections. The $38.00 pays for the minimum wage assistant. BTW the future just called and said their will be another meltdown in about 5 yrs.
 

ghrousseau

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May 5, 2006
Professional Status
Licensed Appraiser
State
Virginia
What's worse, I have befriended a lot of RE agents over the years, and get to watch first hand how they how they do these, and yes they do have their assistants out doing all the inspections. The $38.00 pays for the minimum wage assistant. BTW the future just called and said their will be another meltdown in about 5 yrs.

I think some sections of the REO market are getting wise. I keep reviewing purchase loans for FHA where the appraisal values on REO's are consistently higher than the sales price. The only REO properties that seem to consistently sell at market are the HUD REO's that use a M&M Company FHA roster appraiser to set the sales price. Those seem to go at market or very close to market. I don't know if lender REO departments track these statistics, but they are losing money by using BPO's to set marketing and sales prices.
 

Karl

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Jan 15, 2002
Professional Status
Licensed Appraiser
State
Arizona
Now lets see if again I'll be right (of course I will be)

Are Appraisers as important as they think they are?

Lets see how many BPO's are converted to Appraisal request. @ reasonable fees. (key here is reasonable fees) I'll say for my area that'd be for me $350+ (depending on location) but to please the hungry, & those that can't operate a calculator to determine cost to operate, I'll use lets say, $175.
 
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