250) BPOs and CMAs
02/25/08
Dear Henry,
I'm an appraiser in the process of getting a real estate sales license. How do I deal with CMAs or BPOs? Would they be considered appraisals because I'm an appraiser? If they are considered an appraisal, how would I avoid conflict of interest?
Kevin Ormerod ormerod@mindspring.com
Dear Kevin,
Most states permit real estate agents to make CMAs and BPOs as part of the process of trying to get a listing. Whether it is considered an appraisal depends upon your state's law.
The problem arises when you first make an appraisal and then try to get a listing.
H2
I'm an appraiser in the process of getting a real estate sales license. How do I deal with CMAs or BPOs? Would they be considered appraisals because I'm an appraiser? If they are considered an appraisal, how would I avoid conflict of interest?
Kevin Ormerod ormerod@mindspring.com
Dear Kevin,
Most states permit real estate agents to make CMAs and BPOs as part of the process of trying to get a listing. Whether it is considered an appraisal depends upon your state's law.
The problem arises when you first make an appraisal and then try to get a listing.
H2
225) BPOs (Broker Price Opinions)
01/29/08
Dear Henry,
I have read your Q&A for some time now and always value and respect your knowledge.
I have been a licensed appraiser for 1 year now. Recently I obtained my Real Estate license and have begun selling. The broker I am working with does a large amount of BPO's and feels that I am perfect to help out in that arena. This is great for me but given the fact that I am also a licensed appraiser, does it change the manner in which I must complete these price opinions? Must I disclose the fact that I am also a licensed appraiser? Am I walking a fine line or just paranoid?
Thank you in advance for your advice!
Name withheld by request
Dear Friend,
I have never read anything on this subject. It would depend upon your State's laws.
The only problem I could see is if the broker tells the client you helped them or if your help was acknowledged in the BPO, or somehow someone knew you were helping the broker provide BPOs with your "appraiser" hat on. Since you can't control these things, there is potential for a problem.
My guess is that you are walking a fine line. Rather than jeopardize your appraisal license, I'd pass on this type of work.
H2
I have read your Q&A for some time now and always value and respect your knowledge.
I have been a licensed appraiser for 1 year now. Recently I obtained my Real Estate license and have begun selling. The broker I am working with does a large amount of BPO's and feels that I am perfect to help out in that arena. This is great for me but given the fact that I am also a licensed appraiser, does it change the manner in which I must complete these price opinions? Must I disclose the fact that I am also a licensed appraiser? Am I walking a fine line or just paranoid?
Thank you in advance for your advice!
Name withheld by request
Dear Friend,
I have never read anything on this subject. It would depend upon your State's laws.
The only problem I could see is if the broker tells the client you helped them or if your help was acknowledged in the BPO, or somehow someone knew you were helping the broker provide BPOs with your "appraiser" hat on. Since you can't control these things, there is potential for a problem.
My guess is that you are walking a fine line. Rather than jeopardize your appraisal license, I'd pass on this type of work.
H2
176) Broker's Price Opinions
12/07/07
Dear Henry,
I am adding another revenue stream to my appraisal business - REO wholesale - and I am interested in doing BPOs to get bank contacts established. As an appraiser, is there a problem with doing BPOs besides the low fee?
Name Withheld by Request
Dear Friend,
When an appraiser provides a Broker's Price Opinion, it is an appraisal and must conform to all the USPAP requirements for an appraisal. I don't even think you can call it a Broker's Price Opinion.
There is nothing wrong with doing REO appraisals. However, you should be careful to have the Scope of Work and reporting needs of the lender in writing. Often one hand does not know what the other hand is doing in these situations and the person using the appraisal will think you should have supplied something different than what was ordered.
H2
I am adding another revenue stream to my appraisal business - REO wholesale - and I am interested in doing BPOs to get bank contacts established. As an appraiser, is there a problem with doing BPOs besides the low fee?
Name Withheld by Request
Dear Friend,
When an appraiser provides a Broker's Price Opinion, it is an appraisal and must conform to all the USPAP requirements for an appraisal. I don't even think you can call it a Broker's Price Opinion.
There is nothing wrong with doing REO appraisals. However, you should be careful to have the Scope of Work and reporting needs of the lender in writing. Often one hand does not know what the other hand is doing in these situations and the person using the appraisal will think you should have supplied something different than what was ordered.
H2
109) Broker Opinion of Value (BPO)
06/17/07
Dear Henry,
Here in Michigan "Broker Price Opinions" are allowed if the RE Broker obtains a listing agreement for each BPO that they perform. However local banks and AMCs are telling these brokers that Fannie will also accept them. I know of a broker that does them in bulk for $40.00 per BPO without getting the listing.
Thank You
Thomas Markoski thomas@appraisal2day.com
Dear Tom.,
In most states, the appraisal license law makes an exception and does allows Real Estate brokers to make something like an appraisal -- what you call a BPO -- only in conjunction with obtaining their own listing (not listings for other brokers or for any other purpose).
It is my understanding that Fannie Mae and Freddie Mac only accept appraisals from licensed or certified appraisers. The URAR asks for the appraiser's license or certification number.
H2
Here in Michigan "Broker Price Opinions" are allowed if the RE Broker obtains a listing agreement for each BPO that they perform. However local banks and AMCs are telling these brokers that Fannie will also accept them. I know of a broker that does them in bulk for $40.00 per BPO without getting the listing.
Thank You
Thomas Markoski thomas@appraisal2day.com
Dear Tom.,
In most states, the appraisal license law makes an exception and does allows Real Estate brokers to make something like an appraisal -- what you call a BPO -- only in conjunction with obtaining their own listing (not listings for other brokers or for any other purpose).
It is my understanding that Fannie Mae and Freddie Mac only accept appraisals from licensed or certified appraisers. The URAR asks for the appraiser's license or certification number.
H2
55) Is a Broker Price Opinion an Appraisal?
02/21/07
Dear Mr. Harrison,
A broker wants me to go out and take interior/exterior photos of the subject property and fill out a BPO form (Broker Price Opinion) for bank owned homes. Is that a violation of USPAP since I’m not doing a complete appraisal and giving a value? Please let me know.
Harry harrymassingill@comcast.net
Dear Harry,
What constitutes an appraisal is determined by state law, which usually but not always is based on USPAP. For example, in CT any opinion of value not done by a Realtor directly in conjunction with obtaining a listing is considered to be an appraisal.
Frankly, I think you are skating on thin ice. Be careful you don't fall in!
H2
A broker wants me to go out and take interior/exterior photos of the subject property and fill out a BPO form (Broker Price Opinion) for bank owned homes. Is that a violation of USPAP since I’m not doing a complete appraisal and giving a value? Please let me know.
Harry harrymassingill@comcast.net
Dear Harry,
What constitutes an appraisal is determined by state law, which usually but not always is based on USPAP. For example, in CT any opinion of value not done by a Realtor directly in conjunction with obtaining a listing is considered to be an appraisal.
Frankly, I think you are skating on thin ice. Be careful you don't fall in!
H2