Problems with Broker Price Opinions - BPO Certification?

By
Real Estate Agent with Call Realty / Access Appraisals

Recently I've read several articles & blogs on the topic of BPOs & the problems they are having on our markets, due to inaccuracy, conflict of interest, lack of training, lack of experience, lack of accountability, etc.

Why is this the case?  And what can be done to solve the problem. When short sale deals are forced to foreclosure because a BPO comes in way too high more than just that home owner suffers. The listing agent who was working hard to save the owners from foreclosure, the home owner, even the neighborhood from another bank owned vacant home, etc. This is happening way too often all over the country.

Some have proposed to have appraisers take over, as they are trained and experienced in valuation & their estimates are typically more reliable. They have, or should have no conflict of interest as independent appraisers, they have plenty of training & experience  (1 1/2 yrs full time just to get lic), they have accontability & many standards they have to adhere to.  This is one idea that has merit.

But another idea has come out that promotes the idea of real estate agents having a separate certification or even license that would allow them in some circumstances to do BPOs for a fee.  There would be training required, a certain amount of experience required, specific requirements to adhere to & continuing education required in valuation topics. I suppose that some BPO agents would not want to go through all this & maybe green agents trying to make some fast money would not like it either, but that is one of the problems. One state has issued a ruling that says, only brokers can do BPOs. A number of other sates have limitations placed on BPOs for similar reasons, all based in the idea that something is badly needed in this segment of the industry.  

If we could reduce the amount of un needed foreclosures, we could be helping people recover from this economic disaster faster, & that would significantly help our country. So if we could have BPO regulation in place to make BPOs more accurate, it would be a good thing even if we had to do some training etc. If there were more requirements to be BPO lic. I suppose there would be fewer agents available to do BPOs, & maybe the fees would increase. Hey, that would be good, what if you could get $75 or $100 for a BPO instead of $50 or less?  That would help make the training worth it.

What do you think? I've heard & read the hundreds of complaints about what is wrong with BPOs, so lets see if we can let our leaders know we want change. Oh, that sounds bad, lets say we want improvement.

Comments (6)

Cara Marcelle Mancuso
Golden Girls with SW Desert Homes - Tucson, AZ
Call a Marana neighbor, I'm THERE!

I think the fact that you get $45 for a drive by BPO around here contributes to the fact that only those who haven't anything else to do will do them!  I lost a short sale listing because the BPO came through $5K above NEW CONSTRUCTION comps.  This home was 10 years old and priced right where the market sat, and the offer was for $10K above that because the buyer really wanted it.  It all happened two days before the trustee date that they wouldn't reschedule - and here they'd had the offer for 60 days.  It was heartbreaking and BPO's just give me a bad taste.  Your post is absolutely correct- something is badly needed in this segment of the industry.

Sep 17, 2011 04:59 AM
Dan Hopper
Dan Hopper - Gold Way RE - Westminster, CO
Denver Broker / Real Estate Advocate

As a licensed real estate broker for 26 yrs, I have the credentials to satisfy any BPO request.  I have been doing CMA's for 26 yrs, and a BPO should NOT be any different!!  Drive bys or just outside BPOs are ridiculous and should never be part of this process (that type should be eliminated).  Get the real estate agent inside the property to do a CMA type BPO.  I do not think we need any further certification.  Real estate broker do YOUR job right!!

Sep 17, 2011 05:01 AM
Mary Ellen Holleran
Holleran Real Estate - Chapel Hill, NC

I handle a dozen short sales a month as a consultant and battle BPO's regularly. I challenge them, request new ones, and defend my opinion on the price. It disturbs me that a BPO agent is coming from another county, sometime hours away, to work in an area they are unfamiliar with. I have had reasonable success with this but see that an overhaul is needed. Too many short sale failures because of poor BPO's. Thanks for addressing this, I will look for others to post ideas and solutions. 

Sep 17, 2011 05:04 AM
Craig Chapman
Call Realty / Access Appraisals - Mesa, AZ
The Value Guy

I agree that most agents like yourself with many years of experience in most cases would not need the certification, but one can always learn to do things better, even after that many years. I still learn things once in a while & I've worked in real estate as a agent & appraiser for about 25 yrs.

The key point is that too many inexperienced agents are doing too many BPOs w/o knowing what they are doing, reguardless of if they get inside the house or not. And when there are no regulations to stop the inexperienced from botching things up, too many people suffer needlessly.

Sep 17, 2011 05:08 AM
James Loftis
RealEstate911.com - West Palm Beach, FL
RealEstate911.com

As a licensed Real Estate Broker I have performed 1000's of Bpo's.Would agree that real estate agents wishing to perform bpo's should have some type of certification.

Sep 17, 2011 05:46 AM
Mike Morrison
Will & Will Real Estate Brokers, The Woodlands, Texas - Houston, TX

My brokerage will not allow any agent to preform a bpo. Too much liability and there is a question if e&o would cover a bpo. Besides just look at the risk/reward.

Sep 17, 2011 07:50 AM