North Carolina BPO’s Under Legal Scrutiny

In North Carolina, BPO’s (Broker Price Opinions) are done just like they are done in most states…by real estate agents for a fee of roughly $50-$75.  However, the North Carolina Association of Realtors has been spreading the word that this is in violation of state law.

That’s right…according to David McGowan, NC REALTORS Director of Regulatory Affairs, performing an appraisal for a fee requires a license from the North Carolina Appraisal Board.  The law allows an exception for real estate brokers performing a CMA (comparative market analysis) for a fee IF the entity requesting the CMA is a prospective brokerage client or the CMA is part of an employee relocation program.  The statute does not specifically discuss BPO’s, but according to McGowan they are considered similar to a CMA.

Essentially, this means that the broker performing the CMA or BPO must have a reasonable expectation that he/she will become the list agent for the subject property.  In the case of relocation BPO’s, the relocation company will typically request 2-3 CMA’s and hire one of the agents as the list agent.  Of course, most BPO’s done today are for short sales that are already listed.  To avoid conflict of interest, lenders and asset managers never request a BPO from the list agent.  Granted, they may request “property status reports” from the list agent regarding showing activity and competing listings, but this is a different animal and only happens when the lender is involved in the short sale BEFORE an offer comes in (which is rare).

This will be an interesting issue to watch.  In order to continue processing short sales, lenders will need to hire appraisers, which typically cost over $300.  And of course, many real estate agents depend on the extra income from doing a few BPO’s per week.

This entry was posted in Broker Price Opinions, North Carolina Short Sale News, Short Sale Info for Realtors. Bookmark the permalink. Both comments and trackbacks are currently closed.