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Albany NY Broker Price Opinions (BPOs) Part of the Mortgage problem

By Kevin Clancy

Real Estate Agent with Http://www.clancyrealestate.com

December 04, 2008 02:57 AM

Not a week goes by that I don't receive multiple requests to complete a Broker Price Opinion (BPO) for an out of state BPO firm. A Broker Price Opinion is an opinion of value generally based on a drive by of the property. In general, BPOs are completed by a lender to evaluate non performing collateral. The problem is most lenders sub out the BPO work to regional or national firms that then hire local real estate agents to complete these tasks. BPO's are often compared to appraisals. THEY ARE NOT APPRAISALS. As an appraiser I have minimal standards for a report I need to meet,I need to abide by the Uniform Standards of Professional Practice, I have to have a state license, I have to pass an exam, and I have to have met experience requirements to obtain a license that was reviewed by the state of NY. To complete a BPO there is no specific licensing requirement. You simply need to be a real estate agent or broker.

This is the main problem with BPOs. BPO companies have never ever asked me about my experience. I could be licensed for a week with no valuation experience. It doesn't matter. All that matters is if I can complete the report quick enough and for a fee that is ridiculously low. The fees are a fraction of what a drive by appraisal would cost and encourage agents to cut corners to complete them profitably in my opinion. The result, I am sure, is probably thousands upon thousands of BPOs that are being used by lenders for decision making that are completely off the mark as far as the value of the property. Until lenders take screening the people completing the BPOs seriously, this problem will continue.

If you have any questions please do not hesitate to contact me. Thank You!

Sincerely,