TerryRohrer
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Per the OP: "These are mostly short term bridge/fix and flip loans/fix and hold type loans."
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Performing BPO's using total software
- Thread starter 1Badheckler
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residentialguy
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Ok that's a bit more dicey. But wouldn't that be overcome by wearing his Brooker hat?
TerryRohrer
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Doesn't apply to me as I'm not a broker, but I think it all boils down to the laws of whatever jurisdiction.
residentialguy
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Op is.
Mark K
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- Indiana
I know a broker that's been doing them for years for 2nd mtg. and HELOCs and pre-foreclosures. She's been making about $50K/year doing them on the side of her brokerage business. She violates the law with every one since they don't comply w/USPAP. She doesn't care. The state turns a blind eye on these. One page online report, couple of photos, $100 each and about 10/week.
1Badheckler
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Thanks for the advice and driving me to look into the regs. This is what I found... I didn't find anything that would prevent me from performing on providing BPO's and charging. I just checked with the Appraisal Institutes issue (which you can find in the attached or here -https://www.appraisalinstitute.org/assets/1/29/BPO_State_Laws_01022019.pdf which outlines every states laws/guidelines - State Laws Affecting the Performance of Appraisals/BPOs/CMAs/BOVs By Real Estate Brokers and Salespersons. It appears the ruling is broad authority and I can charge for a BPO if I am a licensed broker provided the language below is included on the BPO. It clearly states may or may not charge- which again will depend on state laws where you hold your license. Also nothing I would write-up a BPO for is considered a federally related transaction anyway.
So unless there is another ruling that I couldn't find, I believe I am in within my rights to charge for BPO's as a licensed managing broker, in WA anyway with this language included.
Thanks for your insights everyone... Now if anyone has done a bunch of BPO's as an appraiser using Total software, I would love to chat.
" Washington - RCW 18.140.020 Summary: Broad (6) This chapter does not preclude an individual person licensed by the state of Washington as a real estate broker or as a real estate salesperson from issuing a brokers price opinion. However, if the brokers price opinion is written, or given as evidence in any legal proceeding, and is issued to a person who is not a prospective seller, buyer, lessor, or lessee as the only intended user, then the brokers price opinion shall contain a statement, in an obvious location within the written document or specifically and affirmatively in spoken testimony, that substantially states: "This brokers price opinion is not an appraisal as defined in chapter 18.140 RCW and has been prepared by a real estate licensee, licensed under chapter 18.85 RCW, who . . . . . (is/is not) also state-certified or state-licensed as a real estate appraiser under chapter 18.140 RCW." However, the brokers price opinion issued under this subsection may not be used as an appraisal in conjunction with a federally related transaction."
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NJAPRAZE
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maybe OP can provide a "Hecklestimate" -- works for Zillow! No license needed (but I guess they're not getting paid for it, either?)
NJAPRAZE
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In PA -- many bankruptcy courts, attys, etc all accept "BPOs" as "valuations" -- holding similar weight as if produced by an appraiser; done because it's typically a lower cost; only diminishes value of appraisal license...
In a mandatory state such as PA - >who can produce/charge for an AVM or alt valuation product (assuming no "certification") ?
1Badheckler
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Yeah it seems like this just another way to get rid of appraisers or at least diminish the value that they provide with a full appraisal report. I was kinda surprised that so many were wanting just BPO's, but again these are not federally regulated transactions or through banks. So they go with whatever minimum requirement they need to fund. Clear Capital and several other AMC's offer dual appraisal and BPO's for their lender clients in almost every state. To think that every broker is breaking the law by providing these BPO's is kinda funny, but hey.
I am quite sure now after checking that I can perform BPO's as a licensed managing broker in my state, WA, with no requirements to uphold any type of USPAP standard or any record keeping other than what the state would require for a Brokerage/Sales firm to keep on record. Which is basically, just the report and the book keeping so they can pilfer my profits for their slush fund.
1Badheckler
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Here are the PA laws straight from the horses mouth- the horse being the Appraisal Institute doc I attached as of 2019.
Pennsylvania – 63 P.S. § 455.201, 63 P.S. § 455.608c, 63 P.S. § 455.608f Effective August 28, 2018 Summary: Broad 63 P.S. § 455.201, Definitions The following words and phrases when used in this act shall have, unless the context clearly indicates otherwise, the meanings given to them in this section: … “Broker price opinion.” An estimate prepared by a broker, associate broker or salesperson that details the probable selling price of a particular parcel of real property and provides a varying level of detail about the property's condition, market and neighborhood, and information on comparable sales, but does not include an automated valuation model as defined in section 1125(d) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (Public Law 101-73, 12 U.S.C. 3354(d)). “Comparative market analysis.” A written analysis, opinion or conclusion by a broker, associate broker or salesperson relating to the probable sale or rental price of a specified parcel of real property in an identified real estate market at a specified time, which is prepared for any of the following: (1) An existing or potential seller, buyer, lessor or lessee of the parcel of real property. (2) A person making decisions or performing due diligence related to the potential listing, offering, sale, option, lease or acquisition price of the parcel of real property. "Short sale." A sale of real property in which the seller's proceeds are less than the amount required to pay off all liens secured by the property. 63 P.S. § 455.608c, Comparative market analysis disclosure (a) A comparative market analysis must contain the following statement printed conspicuously and without change on the first page: This analysis has not been performed in accordance with the Uniform Standards of Professional Appraisal Practice which require valuers to act as unbiased, disinterested third parties with impartiality, objectivity and independence and without accommodation of personal interest. It is not to be construed as an appraisal and may not be used as such for any purpose. (b) A comparative market analysis prepared in accordance with this act shall not be deemed to be an appraisal within the scope of the act of July 10, 1990 (P.L. 404, No. 98),1 known as the “Real Estate Appraisers Certification Act.” (c) Any fees charged for a comparative market analysis shall be paid to the broker. State BPO Laws Page ~ 57 ~ 63 P.S. § 455.608f, Broker price opinion (a) A broker price opinion must contain the following statement displayed conspicuously and without change: This analysis has not been prepared in accordance with the Uniform Standards of Professional Appraisal Practice which require valuers to act as unbiased, disinterested third parties with impartiality, objectivity and independence and without accommodation of personal interest. It is not to be construed as an appraisal and may not be used as such for any purpose. (b) A broker price opinion prepared in accordance with this act shall: (1) Not be deemed to be an appraisal within the scope of the act of July 10, 1990 (P.L. 404, No. 98),1 known as the “Real Estate Appraisers Certification Act,” or a valuation of real estate for purposes of section 8(b)(1) of the act of February 2, 2012 (P.L. 30, No. 4),2 known as the “Appraisal Management Company Registration Act.” (2) Be deemed to be a comparative market analysis for the purposes of the “Appraisal Management Company Registration Act.” (c) A broker price opinion must be signed manually or electronically by the person who prepared it and must contain all of the following information: (1) An identification of the intended users and intended uses of the broker price opinion, if known. (2) A brief description of the subject property and the property interest to be priced. (3) The basis for the conclusion as to the price, including applicable market data or capitalization computation. (4) Any assumption or limiting condition. (5) Any existing or contemplated interest of the licensee who prepared the broker price opinion. (6) The effective date of the broker price opinion and the date that the document is signed. (7) The real estate license number of the preparer. (d) Any fees charged for a broker price opinion shall be paid to the broker. (e) A broker price opinion may be prepared by a broker, associate broker or salesperson only for use in conjunction with: (1) a property owned by a lender after an unsuccessful sale at a foreclosure auction; (2) a modification of a first or junior mortgage or equity line of credit; (3) a short sale of a property; or (4) an evaluation or monitoring of a portfolio of properties. (f) A broker price opinion may not be prepared by a broker, associate broker or salesperson for use: (1) as the basis to determine the value of a parcel of real property for a mortgage loan origination, including a first or junior mortgage, refinancing or equity line of credit; or State BPO Laws Page ~ 58 ~ (2) in connection with: (i) an eminent domain proceeding; (ii) a Federal, State or local tax appeal; (iii) a bankruptcy or insolvency proceeding; (iv) an action or proceeding involving divorce or equitable distribution of property; (v) any other action or proceeding before a court of record; or (vi) the distribution of a decedent's estate. (g) The provisions of this section shall not preclude the preparation of a broker price opinion to be used in conjunction with or in addition to an appraisal. (h) A registered appraisal management company may recruit, engage and negotiate fees with a broker to prepare broker price opinions and may receive orders for and submit broker price opinions to clients. (i) A broker, associate broker or salesperson may not prepare a broker price opinion, and a broker or associate broker may not sign a broker price opinion under subsection (j), unless the broker, associate broker or salesperson: (1) has satisfied the requirements prescribed by the rules of the commission to obtain education in the preparation of broker price opinions; and (2) has completed at least three hours of continuing education during the current or immediately preceding two-year license period in broker price opinion topics prescribed by the rules of the commission. (j) In addition to the requirements under subsection (i), a salesperson may not prepare a broker price opinion unless the salesperson has held an active license for the three years immediately preceding the effective date of the broker price opinion. A broker price opinion prepared by a salesperson must be signed by the broker or an associate broker designated by the broker in addition to the salesperson. (k) In order to facilitate the prompt implementation of this section, regulations promulgated by the commission shall be deemed temporary regulations which shall expire no later than three years following the effective date of this section. The commission may promulgate temporary regulations which shall not be subject to: (1) Sections 201, 202 and 203 of the act of July 31, 1968 (P.L. 769, No. 240),3 referred to as the “Commonwealth Documents Law.” (2) The act of June 25, 1982 (P.L. 633, No. 181),4 known as the “Regulatory Review Act.” (l) The authority provided to the commission to adopt temporary regulations under subsection (k) shall expire three years from the effective date of this section. Regulations adopted after that date shall be promulgated as provided by law.
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