mark wrote on August 09, 2008 10:02 PM: Phil is right. A real estate agent performing a BPO is not in itself an illegal act. However agents that provide these foreclosure BPO's with no prospect of actually listing the property and being paid per job are violating the law. Real estate agents are acting outside the scope of their legal abilities in this instance. The definition of market value that appraisers use pertains to the most probable PRICE that a property would bring...in a specific amount of time. This is what appraisers must be licensed to do. Real estate agents are not licensed to do this.

Phil wrote on August 08, 2008 03:01 PM: It seems as though the agents/brokers are missing the point. The argument is not about removing the ability to complete BPO's. You can complete BPO's. The issue at hand is regarding the completion of BPO's outside of the scope of work detailed in the current law. If you are completing BPO's for a fee with no intention or probability of getting a listing, this is breaking the current law.
I don't believe any appraisers have argued that the state should take away the ability of an agent or broker to report on an pricing opinion to their prospective client.
One of the laughable ideas presented at the hearing, was that appraisers were trying to create a monopoly. An agent interested in providing opinions of value for real property in Nevada, is free to go through the appraisal licesing process. It's not a private club. As an appraiser, if I want to negotiate for a buyer or seller in a real estate transaction, I need to obtain a real estate salesperson license through the state, even if I have knowledge of the market.
Bottom line--if you want to appraise properties, get an appraisal license.

Justin wrote on August 07, 2008 07:33 PM: This is not to disparage brokers as they do have great knowledge of the market. On the other hand consider an example; An REO portfolio of $5,000,000 (20 homes) that are mis-valued by 1% equates to a $50,000 margin of error. The cost to render BPO's on the 20 homes is $1,000. The cost to appraise all 20 at $350 is $7,000. In the haste to do a BPO in one hour (according to Tina)I believe that a 1% margin of error is not unreasonable. It seems like a case of being penny-wise and pound foolish.

1st Time Writer wrote on August 07, 2008 06:40 PM: Appraisers deserve to "stake out their territory", even if it’s through a task force. Once appraisers became "licensed" 18 years ago, they have had to deal with the negative side of consistent governmental oversight, and the Banking Industry whittling away at the appraisal industry through this governmental oversight (bigger banking lobby). If someone provides a value of Real Estate in Nevada, (especially if they get paid for it) it belongs to a licensed appraiser, by law. And by the way, are sales agents the only people who can use listings in a valuation?! Give me a break. That's a poor statement. It boils down to the law, and whether or not sales agents are doing appraisal work, call it what you want. Find the dividing line regarding what the law says, and live by it, and quit whining. Everyone is struggling in these times! Protecting a market share is what Capitalism is all about! And costs of appraisals are a direct reflection of the Law and what it requires appraisers to do, just to sign off on the valuation of real estate. No one should be able to side step a law that is already in place to regulate a segment of the industry. The statement that a Realtor knows home values better than an appraiser is ludicrous! Appraisers are equally as capable of valuing property in this market, the difference is that an appraiser is a dis-interested 3rd party, and a Realtor wants the listing, which creates an interest that may influence value reported. Figure out who does what, by law, live with it, and do what you are supposed to do, and do it better than others. You’ll succeed. That's business.

Sam wrote on August 07, 2008 12:57 PM: An appraisal is also an opinion of value. If you ask 3 appraisers to value a home you will get 3 different values. Real Estate agents do BPOS in hopes of getting the banks business. There is cost involved with doing a BPO so to get reimbursed for such costs is fair. Are appraisers prepared to work for $50, since Debbie Huber thinks that a BPO is virtually the same thing as an appraisal? I as a REALTOR resent the fact that our industry, once again, is getting blamed for homes sitting on the market forcing a decline in value of other homes and an increase in crime. That is the most ridiculous statement I have ever heard. Appraisers and Real estate agents should be more concerned with expediting the recovery of our market not with bickering over who gets paid. There is plenty of business for the appraisers especially if homes are priced at Market value, which is what we REALTORS are doing. We know the market better than anyone. The market will dictate value. If a home is under priced there will be multiple offers on it and the price will be driven up and if it overpriced the price will have to be lowered to sell. If we are not to be trusted to give our opinion on listing price then we might as well start the practice of only allowing appraisers to decide what to price our own listings at, since their opinion is we don't know what we are doing. If BPOs go away there will be an increased amount of foreclosures hitting the market, as short sales will fail and those homes will eventually be taken back by the bank. Fear mongering will not solve this issue.

Tina wrote on August 07, 2008 12:37 PM: I am a real estate broker and have intimate knowledge of BPO's. There are some major issues at hand when it comes to appraisals replacing a BPO. First of all is time. Currently there are hundreds of BPOS a day being completed. A BPO can be completed by a Real estate agent in about 1 hour. Appraisal take days, or at least in my experience. Anyone who is familiar with this market can tell you that we are facing a critical situation right now and time is of the essense. Short sales are taking 2-3 months to get approval and one major lienholder (Countrywide) orders appaisals when they receive offers on a short sale. Countrywide is by far taking the longest time to approve a short sale and they very frequently come back with unreasonable counter offers on price. I can't say this is soley based on the value the appraiser is giving them but I would assume it plays into their decision. There is a difference between market value and appraised value. When a BPO is given the agent supplies 3 recent REO solds and 3 active REO listings. An appraisal primarily relies on solds. The problem with this approach is the fact that we are in a declining market. The value 60 days ago is not the same as the value today. Most lenders put more emphasis on current active listings not solds. This contradicts the primary premise of an appaisal approach. This is so clearly the appraisers trying to get a bigger piece of the pie. All these homes are going to be appraised by a certified appaiser once the home goes into contract.

Joe wrote on August 07, 2008 11:17 AM: IO have been an appraiser and a broker. Appraisers call brokers for info. Brokers know house values better than appraisers. An appraisal is based, at its core, on market comparables. This is especially true in LV where ho9mes are now selling at below their replacement cost. You cannot blame appraisers for trying to stake out this turf, but it is nonsense.

Phillip Dwyer wrote on August 07, 2008 07:41 AM: One of the issues discussed at the hearing was the requirement of a signature by the salesperson's managing broker on the BPO. While this seemed to be dismissed as a relatively unimportant issue, I believe this would help insure accountability and supervision by an experienced real estate practitionor. It's my understanding that a licensed salesperson is to be compensated for real estate services through her/his broker only. However, I question whether the current practice of agents completing BPO's for a fee complies. A signature by the managing broker would also help with this issue.