NC Realtors Push for BPO Law Change

The North Carolina Association of Realtors (www.ncrealtors.org) has begun an email campaign to push for support of Senate Bill 521 – Broker Price Opinions. Below is the email that was just sent out by NCAR…

A major piece of legislation is under consideration in the North Carolina General Assembly and we need your help! Click here to take action.

Under current NC law, a real estate broker is prohibited from providing a client with a Broker Price Opinion (BPO) for fee unless the broker has a “reasonable expectation” of obtaining the listing on that property. North Carolina is currently one of only 5 states that restrict a real estate broker’s ability to perform Broker Price Opinions. SB 521 – Broker Price Opinions – would change that by allowing a broker to provide a BPO under limited circumstances. A BPO typically includes an inspection of the subject property, relevant neighborhood analysis, local and regional market information and trends, and a description of comparable properties and is prepared by a licensed real estate broker with intimate knowledge of their local market. BPOs provide critical information for decision-making and have been widely adopted as a tool in the mortgage industry due to their timeliness, cost effectiveness, and accuracy.

BPOs are commonly used for:

  • Fraud check and additional due diligence on a completed appraisal;
  • Internal non-lending purposes such as portfolio valuation and review;
  • Due diligence of loan portfolios by buyers and sellers in secondary market transactions and to help establish the purchase and sales price of a portfolio; and
  • Due diligence and disposition analysis on distressed loans, including short sales, REO sales, and foreclosure avoidance efforts.

Broker Price Opinions are NOT considered a certified appraisal and do not take the place of one. REALTORS® do not propose taking the place of appraisers. In fact, REALTORS and appraisers complement each other’s services and together meet the needs of the marketplace.

However, BPOs do fulfill a niche in the market not currently being met by other products. For example:

  • According to industry estimates, over 10 million BPOs are performed annually across the country.
  • 45 other states, most recently Mississippi and Arkansas, allow BPOs to be performed by real estate agents.
  • BPOs are also endorsed by the FDIC in the agency’s Loss Sharing Proposal to Promote Affordable Loan Modifications.
  • The Federal Reserve Board has adopted BPOs as part of its Homeownership Preservation Policy for Residential Mortgage Assets.
  • The proposed expansion would not allow BPOs to be used for mortgage origination or refinancing transactions.

For the reasons above, it is imperative the North Carolina General Assembly pass SB 521 and enable real estate brokers to offer a product that fulfills a market demand. Please click here now to contact your state House and state Senate members and ask for their support of SB 521 – Broker Price Opinions.

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