I'm doing a BPO in an area where there is just one closed comp in the last 6 months and 2 in a year. Subject is a townhouse, there are other closed comps but are condos. What do you suggest that I have t do? Thanks!

Pinky

Just expand your search radius until you get the comparables you need and then comment a lot.

Thanks

Here is an email I just received from a well known bpo company requesting my permission to lower my suggested value:

Good afternoon

This BPO was ordered alongside with a full appraisal for the same property. My client requires that the values on both reports are within 10% of each other.

The appraisal came in at $96,000. This value is a 90 day quick sale value that the client has requested.

I am requesting your permission to lower the value on this Bpo to come within 10% of the appraised value.

If you disagree please provide a detailed comment as to why so I can add it to the report. This is a time sensitive issue with my client so a prompt response would be greatly appreciated

In 15 years of providing bpo's this is a first for me.

I'd respond to that email with : Absolutely. I can do it if you'd prefer.

I would not do this. Some agents are easily persuaded because they feel that they may not obtain any future work from a company. I would stand firm on my pricing based on my current local market conditions, comps, values etc...

If an agent change their values based on what someone prefers, this is not a true/factual/honest/unbiased valuation and thus the integrity and value of the property has been compromised via persuasion of what someone would prefer.

Remember that the feds are currently investigating and prosecuting appraisal fraud/inflated values etc....

Stick to your guns and simply document the order with factual supporting information and also notify the requestor that your values can't be persuaded because this would not be your true opinion and would also be fraudulent.

Don't you think it depends on the situation? The appraisal could be at $96k and the BPO could be at $107k. In order to be within 10%, the BPO would beed to be around $105k. I don't know about you, but usually when I am doing a BPO, there is a range that I could give for a value, not just one specific dollar amount. If someone wanted me to make a small adjustment and I felt that it was still well within the range of the property's value, I would do it.

OHAgent, except for one small, ittsy-bittsy thing. Appraisers look at a property differently than we do. They use different standards than we do. In California, they are licensed to do appraisals and we're licensed to sell real estate. We look at the market differently. The regulatory agency that governs appraisers in California has issued guidelines for appraisers who do BPOs under their real estate license *NOT* to utilize their appraisal license number in the preparation of the BPO so that it does not read, or be misconstrued, as an appraisal.

We can argue all day long as to whether we loosely follow the general principals of an appraisal but the truth is unless you're an appraiser you do not perform an appraisal and follow the same guidelines as an appraiser.

There is nothing to say that the appraisal is right either. It's called an opinion.

Well really it depends on how much they want to change it. If it's a matter of a few thousand dollars...okay. I'll change it, no problem.
I look at it like this. If a doctor says you a bacterial infection, he would like you to take a powerful antibiotic. A nurse then says yes, you have an infection of some kind and need an antibiotic. Are you going to listen to the doctor or the nurse?
I don't feel like I'm necessarily wrong but I'm not going to argue my value against a licensed appraiser either.
That would be like the nurse arguing with the doctor.

Now if the appraisers amount and my amount were waaaayyyyy off I'd have to take another look at the BPO and if I felt I was right THEN I'd argue.

I've never had that happen.

Absolutely not. The laws & guidelines for appraisers & RE brokers/agents are different and must be followed as such. In this industry, you must know, adhere to and be able to dinstinguish between your laws and responsibilities versus laws & responsibilities in this industry that fall under the RE umbrella.

Never allow anyone to change your documentation of values. Never agreee to change your documentation of values or even entertain such in any type of communication.

Any company or person that would suggest this is not a company or person that I would affiliate myself with.

I do understand that agents are skeptical of standing their grounds when dealing with these AM companies because it may have an effect on their 'rating' however, I am not one of them. Never had a 'rating' concern and my plate is completely full with RE transactions & REO listings including BPOs.

BPO's & REO's are flooding my office. Myself & the agents in my office are performing BPO's 7 days a week due to the fact that we have a direct assign with a major financial institution for all of their Houston and surrounding area properties. I work everyday. I have no time to enjoy holidays.

As long as your are accurate with your data entry, complete the order on time(and no, you do not have to turn them in early, just on time and not later than it's agreed due date and due time), provied a quality report, provide factual information and document the order accordingly, you will not have a 'rating' problem. You will obtain more business just as I have over the last 30 years.

[quote=MadHatter]Well really it depends on how much they want to change it. If it's a matter of a few thousand dollars...okay. I'll change it, no problem.
I look at it like this. If a doctor says you a bacterial infection, he would like you to take a powerful antibiotic. A nurse then says yes, you have an infection of some kind and need an antibiotic. Are you going to listen to the doctor or the nurse?
I don't feel like I'm necessarily wrong but I'm not going to argue my value against a licensed appraiser either.
That would be like the nurse arguing with the doctor.

Now if the appraisers amount and my amount were waaaayyyyy off I'd have to take another look at the BPO and if I felt I was right THEN I'd argue.

I've never had that happen.[/quote]





Wrong answer. Also, you can't intersect doctor's & nurses with this industry.

Just for the sake of entertining your method of thought, I must ask: Dr Bombay? Dr. Jekyll? Dr. Phil? Dr. Kevorkian? Nurse Ratched? I always make my own decisions regardless of what is suggested and regardless of the suggester. What if you went to your Dr and your Dr informed you that you have a tumor and to let her/him worry about it. Would you? All instructions and advice are not good.

I have requested a copy of the appraisers report to see what his comps were. I feel like my bpo was solid and the suggested sales price was on target. I am waiting to see if they will provide the report to me.

I had another company asked me to re-do my bpo because they said I had used the wrong sq. ft. for the subject property. Three previous bpo's had used 2500 sq. ft. for the subject. Subject property was new, built in 2007 and never listed in the MLS. I pulled my data from the property appraisers office and I knew the builder. I double checked my sources and I was correct in the sq. ft. being 3103 NOT 2500. So I copied my documentation and emailed it to the bpo company.

Soooooooooo argumentative. Wrong answer according to whom? Maybe it's the wrong answer for YOU but it's the way I choose to answer the question. You can do your BPO's however YOU want. But in MY opinion if an appraiser has legitimate comps and the values aren't drastically off I don't have a problem with doing what they ask. See...that's the right answer for ME> YOU can do YOURS however YOU want.

Not so argumentative at all. If your comps support the final value(s) for the subject, why would YOU change your values based on an appraisers value or what someone else would suggest?

The reason for a BPO is to obtain the local broker's price opinion that would truely/honestly/factualy represent the subject's final current local market pricing in the subject's immediate/particular area, not to price the subject at a price that someone else feels or suggest would be better. In other words, an UNBIASED opinion. YOUR method is BIASED.

Your method is unethical in my opinion and something that I never have done and never would do.

Remember that an appraiser is appraising the property based on the subject's current interior & exterior condition, land acreage, dwelling sqftg, interior/exterior amenities, land value etc... The appraiser is not appraising the subject to sell it at a particular price, the appraiser is appraising the subject to obtain the current value based on what I stated above.

Here is something else to consider about appraisers. Often properties are appraised from an exterior drive-by assestment and what is recorded in County records without obtaining interior access. So often, residents make changes, additions, upgrades and add amenities and features on the interior of a property and without the appraiser obtaining interior access, it is impossible to obatin a true value of said property.

If YOU change your values based on what someone suggest, what is the purpose of the BPO? Afterall, you should know your local market better than the AM company and better than the appraiser. You are(supposed to be)the RE professional.

Hopefully this well assist you in all of your future RE endeavors.

Amen. Some of these postings make it sound like there is one and only one value for a house. Bunk. I'm trying to imagine the bottom line on some of their BPO's...$282,016.14. Yep, that's my value. No...there's not a high and a low, that's pretty much it. Not a penny less, not a penny more.

I do prefer that the company NOT adjust my value though. IF I feel it's appropriate I prefer to adjust it myself.

If the change requested fell within my range of value for the property, I would consider the whole "appraisal methodology & definition / bpo methodology & definition" tangential to the request. I can agree that there are vast differences in the two and still agree to modify my value within a range of appropriate values for the property. It might as well be because their numerologist didn't like the way the digits added up. The bottom line is whether the amount of the change is acceptable given my range of values for the property.