Posts tagged Broker Price Opinion
On December 2, 2013, three law firms in Florida, Washington and Colorado teamed together to file a class action complaint on behalf of real estate agents and others allegedly owed unpaid fees for broker price opinions ordered by BrokerPriceOpinion.com. The complaint also names three-related companies First Valuation, LLC, First Valuation Services, LLC, and First Valuation Technology, LLC as defendants on the basis that they are “alter egos” of BrokerPriceOpinion.com and do not have true corporate separateness in their operation. The lawsuit was filed in federal court in Colorado, where the defendants are based.
The named plaintiff in the lawsuit is Kathy Wornicki, a Florida real estate agent, who alleges that she is owed $880 for 29 (more…)
The Appraisal Foundation has drafted a white paper on Alternative Valuation Products and the Uniform Standards of Professional Appraisal Practice (USPAP).
The white paper is intended to provide information to assist appraisers, users of appraisal services, and others, with a greater understanding of Alternative Valuation Products and their use in the marketplace. The paper also attempts to view these products in light of an appraiser’s USPAP obligations.
All interested parties are encouraged to comment in writing before the deadline of December 31, 2013. Send comments to tafcomments AT appraisalfoundation.org.
In the appraisal industry, particularly the residential mortgage sector, there has been a proliferation of products and processes attempting to provide alternatives to “traditional” appraisals in recent years. The primary factors behind development of these Alternative Valuation Products (AVPs) are generally to reduce cost and improve timeliness. (more…)
On Aug. 19, New Jersey Gov. Chris Christie vetoed bill S. 2551, legislation that would have significantly expanded the ability of the state’s real estate professionals to provide broker price opinion and comparative market analysis services.
In his veto message to the Legislature, Christie said,
“While I appreciate the desire to facilitate additional business for real estate licensees in the state of New Jersey, I am concerned about potential consumer confusion.”
The purpose of USPAP is to promote and maintain a high level of public trust in establishing requirements for appraisals and “reliable” valuations.
The problems is, however, that it is subjective. Assuming one can support the conclusion or opinion; beauty is in the eye of the beholder, or in this case, the appraiser. Likewise, evaluation and selection is in the eye of the appraiser – which is why two different and reasonable and competent appraisers can reach two different, but equally credible opinions, on the same property.
And that is the problem I have with USPAP or its compliance and attempts to regulate “good taste” or “attractiveness” in the guise of using “appropriate” comps while avoiding one‘s biases or pre-judgment and experience.
USPAP is used both as a shield and (more…)
APPRAISAL: (noun) the act or process of developing an opinion of value; an opinion of value.
(adjective) of or pertaining to appraising and related functions such as appraisal practice or appraisal services.
Comment: An appraisal must be numerically expressed as a specific amount, as a range of numbers, or as a relationship (e.g., not more than, not less than) to a previous value opinion or numerical benchmark (e.g., assessed value, collateral value).
In general terms the USPAP definition is elegant in its simplicity.
We all understand what it is that appraisers provide. You provide opinions of value. Call it whatever you want, but an opinion of value is an appraisal.
What about BPO’s or CMA’s?
Aren’t they really appraisals dressed up as…something else? (more…)
North Carolina Governor Beverly Purdue signed S.B. 521 into law July 12, and the legislation will significantly expand the ability of the state’s licensed real estate brokers to offer a broker price opinion or comparative market analysis.
The legislation included two amendments provided by the state’s appraisal organizations.
Prior to the new legislation, North Carolina real estate brokers were limited to providing a CMA only in the real estate sales context, and they had to have a reasonable expectation that a listing would result from the performance of the CMA.
Under the new law, brokers (other than provisional brokers) (more…)
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.
The increase in the use of BPOs for these purposes is largely a result in the downturn in the real estate market, and a reduction in the commissions being earned by (more…)