Video Marketing and Mortgage News Designed for Mortgage and Real Estate Sales

Stingray: (March 21, 2010 1:19pm)

Here are my thoughts on multiple offers not translating to higher values: It's my understanding that banks are commonly accepting lower cash offers rather than solid borrowers that need a loan and banks and AMC's are encouraging low-ball appraisals. The banks know how much shadow inventory is really out there and also know that once this inventory hits the market, prices will tumble again. If you were in charge of a bank and had this information, wouldn't you encourage low values? I may be totally off, but what else makes sense?

chrisbrown: (March 19, 2010 3:44pm)

You guys had mentioned to hold off on the audited financials for FHA. Any recent news on this? The deadline is coming up for my financials being due. Thanks.

chrisbrown: (March 19, 2010 2:41pm)

Frank or Brian, is the GFE webinar still available?

CornerstoneKathy: (March 19, 2010 1:44pm)

Cluless..What are your thoughts?? I see agents listings short sales at least 100K below what its worth to generate interest and multiple bids..it seems to work because the final offer is usually closer to value but still slightly lower than market value which would keep prices stable. I know there are TONS of houses sitting empty waiting to go to foreclosure. Owners are telling me they got served papers and havent heard another word in 10 months. I THOUGHT the banks were holding off on wanting to carry the homes through the winter and the home buyers credit and the holiday shopping season but they are still sitting there..why?

Fritzboy: (March 19, 2010 12:21pm)

Maybe people are low balling knowing theres alot of supply and hoping to get a bite. I know I would if I had some money to invest. I do but I'm using it to stay alive due to HVCC climate of making nothing. I am hoping we can get or own clients again. I don't consider an AMC a client. I consider them a thorn in my side I have to deal with. You know how it works. They know whats going on but won't do anything until the AMC pockets are full and then people will realize the blunder it was to thousands of small businesses. I am below poverty line this year. I hope we can sue someday for potential income we lost due to HVCC. I can prove an income for 17 years when we had a free market but it totally dropped to basically nothing. My wife has only been in this country for 10 years learned english, went to JC and makes four times me now as a pre-school teacher. We are slaves not in a profession anymore. BPO anyone. How low can you go. People who are making the decisions should be " ".

Clulessdad: (March 19, 2010 11:52am)

Fritzboy-50 cal-what was he expecting? OMG! Although I agree that the shadow inventory looms large, but they are not on the market yet. If that supply hits the market, prices are sure to drop some more. But if you have 5-20 offers on the same place, wouldn't we expect to see prices going up?

Fritzboy: (March 19, 2010 11:28am)

Clulessdad: I believe its because theres alot of supply that isn't on the market. I live next to one that was taken back by BofA at least 10 months ago. No one comes by. No Sign. Vacant for over a year. This once sold for $700,000 in 2005. I'm glad its vacant, cause my neighbor was a white supremist who did time for a 50 caliber machine gun he hid at the property.

Clulessdad: (March 19, 2010 10:38am)

To any appraisers out there-In SCal, there literally 5-20 offers on every low priced home coming on the market. That kind of supply/demand ratio would seem to warrant escalating prices. Yet the prices remain stable or even lower. I have my own theory, but would like to solicit yours.

StuffedShirt!: (March 19, 2010 10:11am)

Doriejay1, thanks for your comments about the Summit. Frank and Brian did a fantastic job yesterday. They were the perfect way to end each panel discussion. Marty Lough deserves a lot of the credit for pulling the event together. It was his idea to invite the fine young men from TBWS. Stay tuned to www.pacificnwhousingsummit.com and follow along as we begin planning next year's summit next week. And thanks for attending, we are please you thought it was a great event.

StuffedShirt!: (March 19, 2010 10:01am)

I am not a stuffed shirt.

Doriejay1: (March 19, 2010 8:20am)

Thank you so much for being at the Pac NW Summit. So much information, I am a big fan of both of you.I look forward to your dailys everyday. I am glad you are not "stuffed shirts" no pun on those who are, but it is refreshing to see down to earth, intelligent,young men sharing their information for those of us in the trenches. You are great and I wish you well. again America at work with Small Business Entrepeneurs, we need more people like you. Thanks again it was a great Summit.

joecolorado: (March 18, 2010 5:07pm)

TheBigBadAppraiser-EVEN so the review appraiser STILL has to conform to the standards of USPAP and if he or she cannot then they NEED TO BE REPORTED.I dont hesitate in doing that as the review appraiser has no problems making me look bad to my client so I return the favor, if they have errors or use comparable properties which are not suitable. REPORT HIM/HER its the only option. I have also in the pst discussed this with counsel and they have assured me if I can prove financial loss due to the actions of the review appraiser I have a case. I mention both of these facts to any class I am attending where review appraisers strut their stuff. I dont mind the rebuke if I have errors in my report, but not where the reviewer downgrades it just because he or she wants make an impression at my expense....not going to happen on my watch.

feliss: (March 18, 2010 4:52pm)

Our team has been using Home Decision Wizard with great success. My clients love seeing a clear snapshot of their loan modification vs. short sale options. The clarity this software brings has helped my clients make a good business decision for themselves and their families. Definitely would recommend this to any Realtor trying to get those short sale listings--

ShortSaleTopGun: (March 18, 2010 4:33pm)

Your video pole asks "Who should do the property valuations on the HAFA properties?" IMHO, there is no clear cut answer ... if an appraiser is unfamiliar with the geographic area, often the valuation will not represent actual reality ... on the other hand, not all Realtors understand how to accurately value a property (just look at the listings on your local MLS if you don't agree). Perhaps it's not practical, but I would suggest both an appraisal AND a BPO ... let the number crunchers do their job (Appraisers) and the marketers do theirs (Realtors). If the numbers are not let's say within plus or minus 5%, then 'Houston we have a problem' and the appraiser and Realtor would be asked to confer and attempt to resolve the discrepancy. In the final analysis, the true value of any asset is what an average buyer not under any undue influence or duress is willing to pay for it. Rick Kirschbrown ShortSaleTopGun.com

TheBigBadAppraiser: (March 18, 2010 1:23pm)

I agree with your March 17, 12:49pm comment joecolorado. I use a similar approach. You have to paint the broad picture and then explain why you are deriving at your opinion of market value based on market conditions, etc. Not to mention the appraisal reviewer who is going to spend 20 minutes on a desktop appraisal and use the 3 lowest PENDING sales in the neighborhood. I just had a review for an appraisal I did in Central Los Angeles, a densely populated area with a high volume of sales. The review appraiser used 3 pending sales nearly 3 miles away, across 3-4 major locational boundries, in varying economic markets when, in fact, there were at least 30 or so closed sales "comparables" within 1 mile over the last 3 months. I mentioned to my client the review appraiser's address is based out of a different county and is either unfamiliar with the subj's market area and surrounding community, is incompetent or is under pressure by their client. Good luck. Stick it out. There is a God!

dl52163: (March 18, 2010 7:30am)

OK Here we go again. Lets see how bad the NAR can make the system worse with the BPO and no appraisal. GREED is again running the show. Appraisers will somehow get the blame for this one as well when it crashes and burn.

WEELEST: (March 18, 2010 7:25am)

Anybody taken the NMLS/State tests? What did you think of them. Took mine Tuesday and passed but did not like the fed test, questions were not clear

Ill Appraiser: (March 17, 2010 4:49pm)

It's a news report on big banks doing more for the middle class and posters are talking about lrefinancing etc.

Ill Appraiser: (March 17, 2010 4:43pm)

Just posted on World News with Diane Sawyer about saving the middle class. Maybe this is someone who will pay attention. It's worth a try. Anyone else?

Terryann: (March 17, 2010 3:52pm)

BPO accuracy? I am so frustrated. Just waited 60 days on a response to a short sale offer submitted to Chase. The house has been on the market for 9 months, 90 days at 230K before my buyer's offer $220K. Chase just countered the offer at $241,150 based on the recent (after my offer) BPO. Listing agents usually do not do the BPO's, they are done by contract agents ie no interest in the "deal". Inacurate BPO's have cost me a lot of wasted time. Inacurate appraisals too, for that case. Although, I will give a break to the agent or appraiser that has no market history on the house to base anything on, hell I have been in the business nearly 30 years and I am having trouble guessing what houses will sell for anymore. BUT when a house has been actively marketed, not sold and the BPO or appraisal comes in higher than the list price, what is that about???

Fritzboy: (March 17, 2010 3:22pm)

Sorry, I forgot to put AMC's in that boat.

Fritzboy: (March 17, 2010 3:20pm)

Besides not looking at List to Sale price ratio, BPO's don't consider, Concessions. As an Appraiser we have to call all listing agents to confirm whether or not Seller Concessions were given to the Buyer. Then take in to consideration a typical market reaction to those concessions and make appropriate adjustments. Also do a 3 years sales history on Subject, take in to consideration any previous transfer within one year for all sale comps and listing/pending comps. Also perform a one year listing history on the subject. Do a one year market survey, and do a cost approach. Does a BPO do all that? I also feel I should be able to sell houses now. It all makes sense to me now. Who else is more capable than an Appraiser? I'll only charge 1 1/2 percent commish;) Two deals and I could make more than my appraising for the whole year. Put HVCC, AI and Coumo in the same boat and say Bon Voyage.

Pegasus2005: (March 17, 2010 2:49pm)

KrisRealtor--a competent appraiser doesn't automatically ding listings which were listed under market in order to generate offers when determining value. That listing strategy should show up in higher sale to list prices, and should be considered when evaluating the sales comps. Appraisers are always using "what already happened" info, because the best proof of where prices were at any point is to use the actual recorded sales. Sale:List prices can reveal a trend that the appraiser can use as a tool to discover today's value. Sales people by nature have to be optimists, and look toward into the future; if they don't and are constantly negative, they'll never sell anything. Appraisers typically are from "Missouri...The Show Me State".

Stingray: (March 17, 2010 2:18pm)

I'll do that Valuequestor. Glad to hear you've got work! I hope it's a full fee, single story, model-condition deal performed for a non-Fannie credit union. Happy St. Patrick's Day!

theauggrp: (March 17, 2010 2:16pm)

bpo's HA ! Best Possible Outcome is what they should be called. they are a tool for an agent to get a grip on what to price a property to sell. They are a leftover pricing devise from the pre-1989 industry when appraisals were not required or matured to the level they are currently. They are like a flash appraisal at best and if the agent/broker wants to hold the file for 5 years and be liable to the state board and appraisal board as well as civil litigation for when any little discrepency that may/will come up about the way development and communication of the BPO is constructed for $50.00 a pop i say better you than me jack. BPO's & CMA's are supplemental to the appraisal and should be thought of and used as such. just like there are bad appraisers, loan officers and brokers, there are bad agents who are chasing a commission. someone said something about establishing area values. appraisers don't establish, we interpret and report conclusions and findings. really boring stuff.

Kris Realtor: (March 17, 2010 2:16pm)

dd: Big time corruption there! Interestingly I wonder if the financial institutions would care - I've had many short sales denied, more over a year ago than recently ... FHA & VA loans are guaranteed a payout from the gov .. 80-85% .. so these banks MAY be denying the short sales, taking the gov insurance at 80whatever%, get the inventory (property) then sell for another chunk - had one at $201k.. bank asked for $17k more - we gave it - they dragged on - buyers lost interest - went to foreclosure - sold at $180k 4 months later .. FHA insured ..I don't do a lot of REOs .. I've seen agents that DO them began pricing at $40/sq on their BPOs when market was carrying $85/sq .. I had a recent SOLD comp right across street at $90/sq from the $40/sq BPO - ticked me off big time - affects the whole market - so BPOs done by Realtors for their own gain should be outlawed... - outta here! Got work to do!

Ill Appraiser: (March 17, 2010 2:15pm)

Stingray-Once upon a time, a long time ago, before Direct Endorsement came along in the late 80's there was respect for appraisers. I remember it fondly. It was the last time I felt truly independent and unpressured.

Valuequestor: (March 17, 2010 2:08pm)

Kris: It was justa general "hey I'm back" comment. Not really directed at you or Joe. I just can't take all of this too seriously anymore. Like Stingray...I'm worn out. Hang in there Stingray. I'll drink to your health later. Gotta go work... Valuequestor Kelly...out.

Stingray: (March 17, 2010 2:01pm)

You know, I've been appraising 11 years now. Left a corporate career to pursue my independence. College educated, Certified, etc. Almost from the beginning, It's been a daily battle to do business. Value pressure, turn time pressure (remember the 20 year old MB's with no skin in the game?) Then it was new requirements, new forms, new software, E&O, new expenses, no fee increases, bounced checks, no show borrowers, etc., etc. Then the market collapses and now all of your clients are gone. All the while, there was always a sense of disrespect for the lowly "appraiser guy" so many like to call us. I could go on and on with the negatives. I like to be positive, but all in all, it's been a tough 11 years. It has allowed me to be around for my children, which was my primary goal, but I now feel beat up and worn down. I'm not alone or unique and life isn't supposed to be fair, but this business has become an absolute joke. Time for a green beer...

dd: (March 17, 2010 1:45pm)

BPO's are often done by realtors who hope to get the REO listing once the property goes into foreclosure. In fact BPO's are the gateway to foreclosure business! Talk about conflict of interest! Add to that kick backs from REO listing agents to asset managers to get REO business and you are talking real nasty business! There is a definite reason not to short sale if there is individual profit to be made from an REO. If every short sale agent who had a short sale denied and them saw the REO sell for significantly less got the information to the stock holders of these financial institutions, that funny business would stop pronto, but we would need stimulus money to build more jails!

joecolorado: (March 17, 2010 1:33pm)

Kris/Valuequestor-gotta go, need to find some work some where, glad to see that swine flu didnt totally incapacitate you V, will be on line tomorrow.

Kris Realtor: (March 17, 2010 1:31pm)

JoeColorado & Valuequestor: Joe - totally agree - I can see you have a mutual respect for both sides .. as do I .. no argument - glad to know for an open market sale you place more relevance on another open market sale than a foreclosure or short sale .. I understand they must be included, but a buyer may not want to do the work or take the risk of buying a foreclosure or short sale, thus a value to THAT buyer and THAT property ... Valuequestor: I believe you misunderstood the discussion between Joe & I - no argument - discussion ... and try taking the Realtor test these days - not so easy anymore which is GREAT for our profession - weed them out! .. NAR is perhaps just trying to raise the awareness of a Realtor's knowledge in the marketplace - both professions are needed - not one soley over another - one to price to sell - one to validate investment for lender - mutual discussion & respect for each :-)

Valuequestor: (March 17, 2010 1:13pm)

Kris: As usuall I agree with joe and enough said. As for me, I like to see how the realtor arrived at the list price and will make an effort to meet them. I was a Realtor in Virginia for about 5 years in the middle of my appraisal career. I'm a good salesman and few Realtors will know a house and its systems as well as I do. Using NAR's logic I think I should be able to sell houses when I please.....I'm certainly qualified and able. Whats to stop me? NAR's actions are purely that of a bully.

joecolorado: (March 17, 2010 1:00pm)

But dont get me wrong,my Realtors are also aware that if my market data illustrates that the sales price is speculatory,I tell them face to face that I cannot prove a price & also comply with my guidelines.I give them a reason why without disclosing appraisal information or value.It costs nothing to be communicative and polite to your colleague,if you explain why there is a problem from an appraisers point of view and listen to why there is no problem from a Realtors point of view, it fosters respect.It may not get the sale to work, but that is not my job, my job is to protect the investors money by proving a value,but I am not afraid to speak with the Realtor about the sales price and how it was attained.You never know, the Realtor may have a sale that I didnt find in my search,it has happened before & will probably happen again.But dont be afraid to discuss price with an appraiser or Realtor,the information generally is invaluable.

Valuequestor: (March 17, 2010 12:57pm)

I get the killa pig flu, hang low for a week, come back and realtors are fighting with appraisers. Whats the world coming too.

joecolorado: (March 17, 2010 12:49pm)

Kris-I agree,but unfortunatly the appraiser has also to appease the U/Writer that DEMANDS the REO's and foreclosure properties be included. I do comply with the U/Writers requirement,however my appraisals have adequate and current re-sales and actives to illustrate the current open market condition.The REO's and F'closures are added as additional comps(7&,8 and 9), with my value being gleaned mostly on the open market re-sales and actives. REO and F'closures are NOT open market,they are distress sales and should be considered as such,I dont ignore them,I just give the U/Writer a reason to prefer the open market data.if they then wish to reduce the value, WHICH THEY CAN DO,I know that I have given my best for my client as an appraiser.My Realtors know me and trust my judgement as I trust theirs,Its taken a long time and hard work for that trust to mature,I am not going to ruin it 'cos some amc or wahoo wants something different.

joecolorado: (March 17, 2010 12:37pm)

5pence-AI and all assoc's are a business and they want their business to succeed over and at the expense of ALL other businesses including the ASA etc.There is absolutely no excuse for this type of backstabbing as they are more powerful than the single appraiser and they haevm more funds to bend a pols' ear.This is abominable to say the least and I AM a senior member of the ASA and I am appalled that they have sanctioned this letter with the AI.I thought that the intergrity fostered by an assoc. as an appraiser made me stand out a little more than a non member for marketing purposes, but not at the expense of the non member. This helps no one.Et Tu AI and ASA

Kris Realtor: (March 17, 2010 12:37pm)

Oops - one more thing - a Retail property has a different value than a short sale or foreclosure - banks are dumping these homes at incredibly low prices .. my understanding is that an appraiser uses a declining market percentage adjustment to a retail home when there are prevalent foreclosures or shorts in the subject area ... keep in mind that the Realtor ALSO must price the properties at a lesser than Retail price per square foot in order to generate an offer in the first place .. so adding an EXTRA declining market factor to a SOLD price only brings it down more .. this would HAVE to have already been applied by the Realtor in the beginning in order to even generate an offer ...

Kris Realtor: (March 17, 2010 12:33pm)

Central Valley/Joe Colorado - Agreed that communication between Realtors & Appraisers is key - we are both in this market in slightly different ways .. pricing properties to generate offers .. validating offers to support lender's investments .. I don't meet Appraisers at my listings to tell them "I know more than you" .. I meet them to discuss my approach in pricing & the steps I went thru to generate the offer ... some may argue the value of a property is "what a buyer is willing to pay" ... I would add "what a KNOWLEDGEABLE OR ETHICALLY EDUCATED buyer is willing to pay" I have respect for an appraiser's job & don't throw mud at anyone - luckily I am well respected in my marketplace & the majority of appraisers I meet know that, are glad that I am there, disturbed that more realtors don't meet them at their own listings & we discuss the market, the comps used & thank God very few of my listings fail to appraise. Mutual respect goes a long way.

5pence: (March 17, 2010 12:26pm)

joe: in 1994 the AI stuck it's nose in where it didn't belong. They met secretly with FHA, the GSE's and Mortgage Bankers and that was the year amc's and avm's were ok'd. Also wasn't that the time the de minimus was raised from $100k to $250k? The noly reason AI was created was to serve ALL appraisers in promoting education and ethics ONLY - and NOT to make secret deals they were not empowered to do. I say they need to be dissolved along the lines of too big to fail

joecolorado: (March 17, 2010 12:25pm)

They also profess to do this..13. To maintain and ensure the confidentiality and security of data, modification of appraisal reports and the use of an appraiser’s digital signature is prohibited for any purpose other than those expressly authorized by the appraiser.Which happens to be in contravention of their own AI FORMAT which removes the sugnature from the report!!!!They also want to do this-4. Encouraging meaningful data to be provided for the appraisal development 5. Adhering to fairness during a formal reconsideration of value6. Maintaining good public relations for the appraisal management company.Does anyone else see the problmes here?assocs are PROMOTING amcs!!!!at the expense of EVERYONE

joecolorado: (March 17, 2010 12:20pm)

If anyone has any doubts about the prtidanship of the appraisdal associations, please read the attached which was published 2 minutes ago in their Appraiser and Management Company Statement of Principles principle #5. Competent professional appraisers are required to ensure a safe and sound system of mortgage finance and effective consumer protection. An individual’s affiliation with or designation by professional appraisal associations is preferred beyond minimum certification and license requirements. PLEASE NOTE THE LAST SENTENCE......NOW do yopu think the AI, ASA etc are batting for non members?

5pence: (March 17, 2010 12:16pm)

abappraisals : I did one a couple years ago where there were no good comps so I asked the realtor/broker what he used to market the property. This real estate broker has been in the business for over 25 years and had his own large shop. Anyway, he gave me sold comparables from 30 miles away !! about 4 towns over lol. Okaayyyy lol. Not in the least bit comparable. This was an "expert" that I would trust to do a BPO if I wanted a high value. Sorry realtors, you just don't have the chops to accurately value - it's not your fault, you were just trained that way.

cpappraisals: (March 17, 2010 12:08pm)

Matter of fact I have had agents here in CA tell me that they did the BPO wonder why they didn't get the listing as they felt their value was correct so they should have earned the listing. Most of them think they are entitled to the listing after they do the BPO.

cpappraisals: (March 17, 2010 12:02pm)

abappraisal-Be careful. I said the same thing earlier this morning at 7:57am and offended REORealtor1....

Clulessdad: (March 17, 2010 11:59am)

5 pence- No cpa's please! LOL I object to the govt mandating a process as well, especially one where they don't know jack about. But think of it this way. If it were your property, what would you do? I do private money loans, sometimes with my own money, and when you are looking after your own money, you want to make sure that you have multiple opinions on a price/value. I am not an appraiser, but when I do loans on property I contact an appraiser AND real estate agents for their opinions. Multiple opinions give a range and you can make a better informed decision as to what price you think the property can sell or be valued. One opinion, whether it be an appraiser or RE agent, does not a value make. That is why I am against the HVCC. No one is talking about what the correct system should be used in the lending process to get a better handle on home values. I believe that the valuation method must be a process that utilizes several opinions to come up with a value to use in lending.

5pence: (March 17, 2010 11:55am)

Sorry, I didn't address your post correctly - distracted by Volker and Bernacke on CNBC. I think you're right. Considering the quality of appraisers being elevated by amc's, it's best to get more than 1 valuation. But, by far, the appraiser is the cheapest for the consumer when considering they legally have to stand behind that valuation and have E & O for reparations.

abappraisal: (March 17, 2010 11:50am)

I have had agents show up to countless appraisal inspections with their "comps" in hand, as if I don't know what I'm doing. Inevitably their comps are not the ones that are most proximal, recent and similar to the subject property. They are cherry-picked to support the value that they've told their seller they can get. They conveniently skip the comparables that sold low. I had this happen just a week ago. The subject neighborhood was solid REO's and short sales for the past 6 months, but the agent went over a mile away to print out comps to give me that were standard sales from other neighborhoods. She also told me she had 10 offers above the sales price. Yeah, and some idiot bought a ghost in a bottle on e-bay for $15,000! your point is? If this is how she would have done the BPO we would soon have an overinflated market again. Don't tell me that the agents aren't trying to do the BPO and get the listing. There is an inherent bias in this that an appraiser just doesn't have!

5pence: (March 17, 2010 11:46am)

Sure clulessdad, bring cpa's into the mix too. I think the owner should pay for a BPO if they want to check the appraisal - that would be smart. But I don't see the necessity of it being mandated.

Clulessdad: (March 17, 2010 11:41am)

Personally, I think a bank, or the owner of a property should get a BPO, or several of them, AND an appraisal. If it were my money of $100,000+ I would want the entire range of opinions in order to price and sell it right. Both agents and appraisers have a different value added benefit, and the cost is not that much for a $10-50K range difference. It is a stupid business decision to save $400 when literally Tens of Thousands of Dollars are at stake. We, as owners of many of these banks should be outraged at the stupid collaberative efforts of these dumb banks and a stupid government. I mean after all, don't you want to have multiple opinions on everything?

joecolorado: (March 17, 2010 11:41am)

just remember that when you are speaking with a good ethical appraiser and you really annoy him or her by stating BPO's should be used,as appraisals are too expensive and unecessary as you as a Realtor can do just as good a job estimating value for a far cheaper amount.See how much and what kind of feedback you get at that point.You'll be lucky if they EVER get the pencil you are holding out of your system without the need of a good proctologist,who you can then lecture about being too expensive as an MD would have sufficed as they are less expensive and know the system just as well as a proctologist.

joecolorado: (March 17, 2010 11:32am)

appraisers are not the only issue here, everyone in the Real Estate industry including Realtors are as much to blame as anyone else,believe me when the Realtors get more tired of "low appraisals ruining their sale"when there are no more appraisers, what are you going to do then?who are you then going to blame?I dont see ANY buying agent/Realtors blaming the appraiser when asked to do an appraisal on a property and the Value coming in "Low" which helps the buyer,just the opposite,blame the appraiser,why not jump on THAT bandwagon,everyone else is, and you may as well get your pound of flesh before its all gone.Dont worry we are easy targets, we dont fight back as we are independent of each other so we cannot gang up on you.

5pence: (March 17, 2010 11:32am)

You realtors just don't have the experience or the liability in your BPO's to offer a reliable valuation. Realtors are subject to whims of buyers and seller and that's where their mindset is - that won't change. It take years of discipline to become an appraiser and properly valuate properties independently. If you're going to do BPO's you need to be as liable as appraisers and that includes answering to the state appraisal board. None of you are capable of independent valuations, you're not trained that way. Admit it and leave valuation to the experts.

joecolorado: (March 17, 2010 11:26am)

how much is a bigger piece of $300+/- for goodness sake.there isnt much more, perhaps if you had to rely on a relatively small amount for the liability taken compared to others in this industry you wouldnt be so quick to condemn appraisers from wanting all of the massive $300.

AgentInBend: (March 17, 2010 11:19am)

Let's discuss the real issue here: Appraisers got screwed by HVCC and they want a bigger piece of the pie. But to throw real estate agents under the bus by arguing that agents are not "properly trained value specialists" is ridiculous. If that's the case, perhaps agents should not be able to provide an opinion on price to potential property sellers but be required instead to recommend that sellers pay for an appraisal before listing their property for sale. If there's a valuation problem with distressed properties, it has to do with significantly underpriced REOs, not short sales.

Robs Homes Online: (March 17, 2010 11:04am)

I'm not trying to say that Appraisers should be drummed out, but look at what a BPO is done for. In most short Sale situations, the Realtor performing the BPO is not the listing agent, it's a third party agent giving an assesment of value based on condition and market comparables. It costs the bank $50-75 for the BPO as opposed to the $300-400 that an appraiser will charge to do an appraisal. They are not trying to lend money on that value, just find out what the investor is willing to take as a % of the principal amount. On REO properties, the listing agent typically does a BPO to give the bank an idea of the market value of a home (oddly similar to an agent doing a CMA for a homeowner). If they go to high, the property sits and doesn't sell, if they go too low, the market typically reacts with multiple offers because of the under value situation. A lot of times the bank will ask for multiple BPO's from multiple agents, not all related to the sale. How is that bad, guys?

ciappraiser: (March 17, 2010 11:00am)

Marsia - is that right? Is it just agents or brokers who aren't allowed? I'm going to have to check. Being an under-employed appraiser, I was very annoyed by an email I received this morning from a local broker forwarding this daily show to me (which I watch every day regardless) with a note bragging how NAR has put the final nail in appraisers' coffins! Unbelievable! Be careful what you wish for - if you thought fraud was bad before, just wait folks. This market will be driven so far down. I don't like to use short sales now if I don't have to - foreclosures are usually better comps in my area. I am so angered by this email. Join your Coalitions and guilds appraisers - CCAP in Cali wherever you are - we must unite to fight this beast!

joecolorado: (March 17, 2010 10:47am)

pence is absolutely correct,the BPO provider has on the face of it, no liability to anyone but has a vested interest in the outcome.now THAT sounds fishy.Anyone doing BPO's should consider that when doing these opinions, as they will be liable when it hits the fan.If you act as the expert in a situation where you are employed as the expert, you had better make sure that you are insured for that expectation, as its coming....

abappraisal: (March 17, 2010 10:45am)

In the ABC Realty scenario, isn't it possible that ABC Broker also did the BPO coming in at $150k..then sold it to ABC LLC..who then resells it later for $200k? You don't see a bias in this? This is happening everyday. Most of the time it's not an LLC but an agent with a buyer in his back pocket. The agent low-balls the BPO, his buddy buys the house at that price, and a few months later sells it thru another agent and splits the profits. If a qualified appraiser had peformed the appraisal, this would not have happen. As an appraiser who does reviews, I can tell you wholeheartedly that a license doesn't make you qualified! These appraisers accept the low fees paid by the AMC's who now run the appraisal industry. They crank out 3-5 appraisals a day for $175 a pop and turn out crap! You pay for what you get folks. A $50 BPO from a broker with a bias, or a $350 appraisal from a qualifed unbiased professional? The HVCC has given the incentive to the scum. BPO's are just the next step down.

cpappraisals: (March 17, 2010 10:43am)

Marsia-Your industry needs more like you....Bravo..

joecolorado: (March 17, 2010 10:42am)

as to getting annoyed at lenders for not lending money on your listing/purchase......ITS THEIR MONEY!The appraiser was in your court by telling the investor their money was "safe" by at least $16,000,(so apparently not ALL appraisals come in at sales price hmmmm!) its not the appraiser that you should be cowing at, its the system that permits lenders from deciding who and when to lend their money.The nerve of them!

dbogart: (March 17, 2010 10:40am)

The great thing about the Home Decision Wizard is your ability to enter an owner's existing loan or a proposed loan mod. You can even enter a best case loan mod and see how it compares to a short sale - rent- and repurchase senario. When owners are significantly upside down it usually dosen't matter what the loan mod offer is because the short sale - rent- and repurchas scenario usually pencils out better. The key is having a simple way of presenting owners with a side by side analysis so they can make a clear and informed desision. With the Home Desion Wizard you can complete this analysis in 5 minutes!

5pence: (March 17, 2010 10:38am)

In a BPO the realtor is not answerable to anyone or liable if that value is wrong whereas an appraiser is. That's why only appraisers should value property - that is all they do! In a normal year the appraiser sees the insides of hundreds of homes and analyzes the market for that home. That entails an in-depth analysis of thousands of homes. This goes on with the appraiser for years. No realtor can come close to that and no realtor is liable for the value they come up with. I believe the samrt move is to get those that know value best and are liable for the conclusions they draw. Write your state boards about BPO's with eszradams link that shows whether or not yours is a BPO state at the first 2 posts of this thread.

Marsia: (March 17, 2010 10:35am)

I'm a Realtor in California. It's illegal (DRE rules)in CA for non-appraisers to do BPOs, yet lenders still request them & many agents, until they're caught, are doing them (not me!). A big problem I've had is when the BPO comes in too high. This happens a lot & the rumour going around is that the agent doing the BPO is hoping to get the listing after foreclosure. Hmmm. All the loan modification government programs haven't helped any of my clients who need & qualify. I know no one who's has gotten one with Chase. Wachovia has been wonderful for both loan mods & short sales. I've been telling my buyers & sellers about the appraisal issues, trying to get them as riled up as I am. NAR & local AORs don't get that this crap is rolling down hill and is hitting the real estate agents hard, since 99% of agents don't understand the real loan process. I've done both.

joecolorado: (March 17, 2010 10:34am)

the fact that you have had appraisers that dont know what they are doing doesnt allow you to throw mud at all appraisals.Did you report the appraiser?did you question the appraiser's abilities ON SITE?I have no objection to discussing anything BUT value with a Realtor as THEY know the current sales market a hell of a lot better than I do.They should do, its their job.I talk to EVERY Realtor on an appraisal project,they are a wealth of information, but I do NOT listen to anyone about Value...thats MY job.

GODLIKE: (March 17, 2010 10:32am)

DIVIDE & CONQUER They've won! Just reading these posts day after day show me that most of you have bought into the claims and therefore THEY have won. We didn't need mods on the system, the system worked. We did need more enforcement, but that's true of many industries. Instead of bickering and deciding what part of the CHANGE you are willing to accept why not just reject their whole premise as flawed? Now I've got to go to work.

joecolorado: (March 17, 2010 10:28am)

Kris/Rob-generally you are correct,when a Realtor meets the appraiser at the home and discusses PRICE,the appraiser gets an insight as to the Realtors market,you are not permitted to discuss value with the appraiser as that may influence his/her opinion of the value which is the reason for the advent of HVCC.....appraisers being influenced......Dont write off the fact that appraisers dont see inside every house,the Realtors should be contacted on every comparable property used and the facts discussed,again if the Realtor gets an estimate of value not concurrent with his/her opinion of price doesn't make it wrong,it just makes it different.The investor isnt relying on Realtors opinion to lend money,they rely on disinterested 3rd parties.You have a vested interest in the negotiations which precludes you from influencing an independent decision by discussing value.We are also not there to stop a deal,we are there to ensure that the investors money is safe given the current market.

Central Valley: (March 17, 2010 10:26am)

Kris Realtor - It is very sad that most don't understand what a knowledgeable and experienced appraiser is supposed to do..... The appraiser should know the market, they should be familiar with supply/demand, they should know what the buyers are thinking but, the REAL appraisers have been forced out of the market and/or not allowed to do their job properly (thanks to regulations). I am both an appraiser and a Broker and again, it bothers me that neither side realizes that communication is key!

Kris Realtor: (March 17, 2010 10:21am)

Further if LENDERS are the ones with ultimate decision on value I have a REAL problem there ... they are the ones that overvalued them in the beginning ... also the banker lady behind the desk typically doesn't know one model against another or how many of a particular model are in a particular subdivision ... issue happened to me last year - sold townhome to some buyers $10k under list price, appraiser appraised it $6k over sales price, lender REJECTED the appraisal !!! - they did some research on Zillow - What the heck? This is what Realtors are dealing with in the market - my buyers were FULLY educated in the market after me showing them homes for ONE YEAR - at least 80 different properties and they chose this one after a full CMA (BPO type form) from me .. they got what they wanted, paid what they wanted ... LENDER in all their knowledge of the marketplace (NEVER even BEEN in one of these properties) disagreed ... again grrrrr...

Kris Realtor: (March 17, 2010 10:13am)

I totally agree with Robs Home OnLine - I meet EVERY appraiser at my listings to discuss value ... they are not aware of the DEMAND on the home (# of showings, feedback, etc.) - they have not been INSIDE the comps (solds) - they don't show the COMPETITION (actives) - they don't talk to buyers in the marketplace every day to know their wishes (back to DEMAND) in the market ... Realtors are required to adhere to their Code of Ethics - just because you guys figured out a way there could be FRAUD in this scenario does not mean that every Realtor out there has that on their mind ... we are simply trying to get these properties closed and move the inventory AND establish REASONABLE values in the marketplace to help reduce the short sale inventory ... grrrr ....

azdiggs: (March 17, 2010 10:05am)

I am a Realtor and don't agree that the BPO's are taking business away from the appraisers. I think that both appraisers and realtors have a place in this market. The problem is that the realtors also need a certain amount of education, certifications, and production of BPOs before they should be contracted. I think the realtors and REO listing agents that perform BPOs offer a valuable service for the distressed market. I don't however, believe that they should replace the appraiser in the lending arena, again b/c of educational requirements and b/c they act as a disinterested 3rd party. Everybody has a place in this market--change is inevitable. We have to find opportunities rather than blame and have regulations in place, so Joe Blow the Realtor, that hasn't sold a house in 3 years is now performing BPOs. And yes, there will always be fraud, but there has been fraud in every venue of real estate--appraising,lending,title,government and the realtors. There is theft in every industr

Dominic: (March 17, 2010 10:04am)

I like the idea of the Home Decision Wizard, but how can you compare a loan mod and a short sale when the time it takes to process either one is six months to a year? You can only compare a short sale to a loan mod if you have the final terms of a loan mod. What the software cannot address is the long waiting period and potential money lost in making payments/trial payments on a home that might only eventually foreclose. A good idea, but it cannot solve the actual problem at hand: getting definitive answers from the Lender in an unspecified qualification duration period. This is especially true when Lenders show initiative to work with borrowers when, behind the scenes, there is no real intention to modify. I've seen it happen too many times. You can't shoot a moving target. While the idea of the software is a good one, it does not ameliorate a fundamentally flawed system which is the crux of the problem.

mdeery: (March 17, 2010 9:59am)

will stop and people will not have to pay overvalue to buy a home anymore, as demand will plummet due to higher rates and no tax credits.

St Pauly Girl: (March 17, 2010 9:59am)

One more thing to add. How is a BPO keeping the valuation method separate & independent from the parties earning a commission in the transaction. Doesn't that violate a consumer protection policy somewhere?

St Pauly Girl: (March 17, 2010 9:57am)

BPOs with no appraisal???? REALLY?!!! Very Very Very Scary. If BPOs are such a sound decision, then why are my appraisal valuation on purchases coming in lower than the purchase price & listing price? In the end, it will be the lender to determine if they will fund this without an appraiser; and I can't see how it would happen & be a sellable loan. Any other thoughts?

Robs Homes Online: (March 17, 2010 9:55am)

Whoa guys, how can you bag on Realtors doing BPO's in favor of Appraisers, but then harp till the cows come home about HVCC being what's killing the market. When you have deals being killed because of HVCC and the value is LOWER than what you are trying to lend, but then want to exclude Realtors from performing BPO's which will help properties sell quicker, remove unwanted inventory, and speed up the market recovery that doesn't work. I love you guys, but on this topic you are way off the mark. Realtors know how to supply Lenders with accurate valuations more so than Appraisers do. When was the last time an Appraiser went out previewing properties, showing buyers, or listing homes in order to get knowledge of the market? They don't, they just look at what has sold (which, they have never been in before) and don't typically know what the market is doing because they don't have knowledge of what buyers and sellers are thinking about the market. Realtor BPO's are a good thing.

mdeery: (March 17, 2010 9:54am)

Seriously, HVCC appraisers will hands down come up with a better value than an agent who will only decipher value on a self serving way on any transaction. I am noticing a trend on my last several purchase transactions..I have seen agents bidding up values and getting buyers into contract because there is so little inventory but a huge demand for homes to take advantage of the tax credit before it expires. Needless to say all of these homes did not appraise and were priced anywhere from 3-10% over value..when i walked the agents through the appraisals it was then i realized that the majority of them have never been taught how to read an appraisal report and actually admitted to me "well they are in contract and will figure out a deal"...seriously agents?? well two of my buyers backed out because they could not agree on a deal and now both of them are out 2 appraisal fees each. I actually cant wait for rates to rise and the tax credits to expire because then this stupid bidding will sto

joecolorado: (March 17, 2010 9:43am)

when it hits the fan...again, the BPO's will be targeted and blamed,which will in turn spread the love between us all.Realtors, be careful what you wish for,as its coming......

joecolorado: (March 17, 2010 9:40am)

Dont know what everyone is getting so het up about, doesn't BPO mean Broker PRICE opinion? thats a lot different that BVO broker VALUE opinion.Chill out guys, remember you get what you pay for.

cpappraisals: (March 17, 2010 9:37am)

brainstewn-If an appraiser missed that you need to report them as joecolorado said. It was probably some seasoned AMC appraiser who did the job for $150 and rushed through it. What that appraiser told you does not apply to all of us. If an appraiser can not determine the design and appeal of a property then per USPAP they need to decline the job. What buyers are saying or looking at does not matter. What they are willing to and do pay for the property does matter.

Central Valley: (March 17, 2010 9:32am)

Can a licensed appraiser sell RE and do loans without a RE license? Why should an RE agent/broker, be able to do valuations/appraisals without an appraisal license???

cpappraisals: (March 17, 2010 9:22am)

Sorry another typo....meant to type appraisers and appraisal...typed my own profession wrong this time...

ART OF LIVING: (March 17, 2010 9:22am)

Bottom line this entire issue is fuel by the almighty dollar. If the REO Co. can obtain a BPO for a meager $50. from an agent with nothing better to do verses paying the Appraiser $300.+ for the same basic information which do you believe they will opt for. Both REALTORS and Appraisers are qualified to know the pulse of the local market. REALTOR should raise their fees to that of the Appraisers and lets see who gets the job.

cpappraisals: (March 17, 2010 9:20am)

philsotelo-Hey..$50 is a lot to us appraisers right now and from what I heard there are even some appraiser out there who will do an appaisal for $50...LOL

philsotelo: (March 17, 2010 9:17am)

Appraisers should get the orders, we Realtors are already getting paid a commish on the sale. It's not like we get paid a crap load of money for them anyways ($50.00 per BPO).

sus92691: (March 17, 2010 9:04am)

I've seen some BPO's from "Reconcillation/Review" work...and the majority are questionable..& I'm not from the market & I did not have Relaible Data to check...so to add a $50 BPO on top of a $15 Recon/review from someone outside of the market.....just one more big mess....this process should not be accepted....quick & cheap....Short Sales take forever anyway... AVM's, NAR's - RVM's...I vote for Zillow....appraisers are going to be extinct very soon

cpappraisals: (March 17, 2010 9:04am)

REO-You should only find my statement offensive if it applies to you. People trash appraisers all day on this blog and I NEVER get offended as I know it does not apply to me. I apologize for the typo. I am well aware that Realtors are trademarked. Realtor or not you are still a real estate agent and I have had both give me bad comps in markets I am very familiar with and have ample data to support the "low value appraisals" as you say. You can have 500,000 offers over the listing price doesn't mean it is worth more until the buyers are willing to come out of pocket for the difference. I won't get as "offended" that you typed my screename incorrectly. Sorry I forgot to hit shift. Send the Realtor police after me ...LOL..

Central Valley: (March 17, 2010 9:03am)

brainstewn - As an appraiser, that individual does not know what they are doing! And yes, there are good and bad in both industries! USPAP was established to protect the consumers. There is NO legal recourse to an agent/broker doing BPO's (other than appraising without a liscence....)

joecolorado: (March 17, 2010 8:53am)

I have seen several Realtors state problems with "low appraised Value"due to incorrect information or non familiarity with the area but how many Realtors have actually reported that particular appraiser to the State board?If you have not done so YOU ARE PART OF THE PROBLEM.I wouldn't hesitate in reporting a fraudulent Realtor as it demeans and dilutes my trust in that profession.I need that trust to operate my business as an appraiser. Why should an appraiser be any different?If they have incorrect information and are fraudulent, report them, dont just bitch about it, do something.Get rid of these parasites that are ruining our professions.

Lonnie Foreman: (March 17, 2010 8:52am)

Thanks for the info on Home Decision Wizard. I am constantly running into clients that are not sure which way to go. This should work great for showing them their options in a clear and decisive way. I am plannning to use it today in my presentation.

CO Appraiser: (March 17, 2010 8:52am)

I just completed an appraisal for a divorce case in which a BPO was also done in lieu of an appraisal. The BPO was $40k below market and it turns out the agent's BPO was completed by frinds wife that had not entered the property in 6 months, But she had been to the residence several times for dinner parties over the past 10 years! Needless to say she used comps that were not comparable and on significantly less acerage which drove the value down. You can guess which side she was on. Her response was there were no good comps; however, I had four great comps and the BPO was tossed aside.

brainstewn: (March 17, 2010 8:51am)

The stereotyping of everyone chiming in on this subject is nauseating. There are good and bad appraisers. There are good and bad BPO agents. If anyone chiming in here had ever worked with an asset manager, he/she would know that the BPO is usually done with strict criteria determined by the asset manager. They would know, that seasoned Asset Managers prefer two BPO’s for the same cost as one appraisal. An appraiser told me, a real estate broker, he can’t factor in a very important factor in determining value – appeal. He does not know what buyers are saying today, He doesn’t know how many showings a property has had vs how many bona-fide offers have been presented. What percentage of appraisals have you seen that say something other than average? I say 5%, but you might know better than me. A home with 4 windows on the wall between the garage and the living room of a home is unappealing and unsafe. An appraiser missed that recently.

Ripleysbuddy: (March 17, 2010 8:48am)

I'm an appraiser and a minority member of NAR (albeit not a WILLING member). How is it that NAR's support for the BPO as opposed to appraisals DOES NOT constitute a CONFLICT OF INTEREST fOR NAR? They are supposed to represent both real estate agents/brokers AND appraisers. They certainly are NOT supporting appraisers on this issue - leading me to wonder why we HAVE to belong to NAR, plus the State & Local realtor groups and pay dues that do nothing for us? Anyone know a hungry class-action attorney?

joecolorado: (March 17, 2010 8:47am)

REO-dont take offense,PLEASE report the offending appraiser,let the State decide on his/her fate,dont just accept the figure if you consider incorrect information/non familiarity with the area has resulted in a useless estimate for you. REPORT THE APPRAISER, BUT also realize there is no such thing as a low appraised value.There is an estimate of value in your opinion which does not meet your expectations, but "low value" does not exist.we all live in glass houses and your aspect although welcomed is different from an appraisers.I happen to use actives as well as very recent solds and decide from the market the estimate of value,including what the CURRENT market is doing not just the historical,all appraisers should also consider this in their deliberations.but if they dont and they have errors, use the State to sanction them,thats why the State gets paid the big bucks.

Central Valley: (March 17, 2010 8:40am)

BPO's? Why was FIRREA created in 1989? Read it

Sheraldia: (March 17, 2010 8:35am)

Did a realtor do the BPO on Todds house?

joecolorado: (March 17, 2010 8:34am)

they also cannot sign what they dont know about so if its not offered then its unknown.

REORealtor1: (March 17, 2010 8:33am)

coaappraisals: I find your comments highly offensive. I've closed over 64 properties in 12 months, my company over 400- we do BPO's in our sleep. I'm CONSTANTLY fighting low value appraisals from some appraiser from another county who does not know the market, undervalues the property or values right to the list price (which I did not recommend by the way) when I have 14 offers and 8 are over the listing price! AND the word Realtor is trademarked, therefore, it's always capitalized. I would think someone as smart as you would know that. Fingers can be pointed in all directions in this mess!

joecolorado: (March 17, 2010 8:33am)

Dont forget, the AI and all the other associations are NOT speaking on behalf of ALL appraisers,they are pretty much protecting their own members, which is understandable from their point of view, so dont let that letter fool you.When the push comes to a shove, the associations will not defend or help non members as its not their obligation to do so,the onus is to protect their own members only and they will want you to join their orgs to get "protection".

GODLIKE: (March 17, 2010 8:32am)

JCOLLINS as far as I know the Seller doesn't have to sign all offers. They normally only sign the ones they accept and in some states only after it's been fully negotiated.

SouthernBoy: (March 17, 2010 8:32am)

I dont know how it works where you are, but here a BPO or market analysis is done on a short sale property or REO and the BANK(servicer)will get an "Appraisal" from a licensed appraiser and maybe one or 2 more bpos. So I don't follow how terrible these bpo's are and how they are killing appraisers. Remember Appraisers are getting the finger pointed toward them for the loan crisis for their values.

Homefront Solutions: (March 17, 2010 8:26am)

jcollins, I agree any additional infromation we can present to the homeowner helps to educate them and allows us all to work more ethically and responsibily. My biggest concern with the way the software works is all the variables that it requires we "assume" for years to come. I certainly dont have a crystal ball to be able to know where the market will be in 2-5 years.

REORealtor1: (March 17, 2010 8:19am)

As an REO listing agent, Cluelessdad, the BANKS require buyers to use THEIR lenders to provide a pre-qual, not the Realtors. This is a PIA for me, but, it helps reduce fallout, introduces the buyer to a competitive loan (and there are those who are being taken advantage of and change lenders). As for BPO's vs appraisals: WE NEED BOTH. The true perfect valuation model is one appraisal and two OUTSIDE BPO'S. As for all this new short sale flipping I'm totally appalled. Fraud is fraud is fraud. I hope anyone who sees this go on reports it. I've had so many 'seminar gurus' lately wanting to put a low offer on my short sales with the understanding that they are going to find an end buyer to close the same property that day and they don't have a nickel in their pocket. Why would I put a straw buyer in the middle of a short sale at a price less than what I know I can get from a retail buyer and make a difficult process even harder. Double commissions? Does that equal double jail time?

jcollins: (March 17, 2010 8:09am)

HOMEFRONT, That is exactly what information will help them with.

GODLIKE: (March 17, 2010 8:08am)

ABC Realty's broker and agents involved can loose their license for your short sale scenario. I would think there would also be some funds recovery from the Realtor Recovery Fund. All this would be on top of any other action &/or jail time. Nope, not something I'd want to be involved in.

jcollins: (March 17, 2010 8:06am)

Does'nt the seller have to sign all offers either accept or reject. If I was the agent I would be demanding that this happens. Atleast, it would cut down on the fraud and/or add to the crime.

Boingk: (March 17, 2010 8:04am)

BPO COMPS: Any house that sold within the last 36 months at a price that will satisfy the valuation for the subject property, regardless of distance, size, and condition.

Homefront Solutions: (March 17, 2010 8:02am)

I agree that the Home Decision Wizard software looks really cool. But as a non profit corp that works with homeowners through mortgage brokers and real estate brokers to process loan modifications and short sales, the majority of the clients that we deal with have already made up their minds purely by emotion, whether or not they want to keep the house or sell the house. Very few homeowners that are currently in distress are looking at their situation from a business standpoint. There are very few homeowners that we have come across that are looking 5 years ahead. They are trying to solve their current situation now.

Bad dog: (March 17, 2010 8:01am)

.

Boingk: (March 17, 2010 8:00am)

AMCs must always be in the loop whenever they can help it. AMCs are mostly owned by the banks. And banks must get a cut in all parts of a real estate transaction. Everyone else must satisfy themselves with the table scraps.

cpappraisals: (March 17, 2010 7:57am)

The PROBLEM with realtors determining value is that they don't even know what a comp is. 10 times out of 10 when I do an appraisal with a relator present they hand me a bunch of what they think is comps. Never and I mean never have I been able to use one of the comps they provided. Talk about inaccurate values....LOL...

Nuke 'em Until They Glow and Shoot them In the Dark: (March 17, 2010 7:56am)

Appraisal Institute Nailed it right on the head! Somebody is telling the truth! Oh my gosh! No wonder NAR it upset. The truth hurts don't it NAR!

SoCalBroker: (March 17, 2010 7:48am)

What am I missing here? HVCC is required on transactions where the new mortgage is being sold to FNMA/FHLMC, correct? So why can’t the bank contact the appraiser directly for the “appraisal/valuation/BPO” (whatever you want to call it)? Why would an AMC be in the loop? It also doesn’t have to be a full blown appraisal- a drive-by is fine. The house is being valued for sale, not for purchase. The lender for buyer of the short sale/REO property is going to require a full appraisal. And don’t forget, an appraisers job is ONLY to determine value. A home inspector’s job is to find out what may be wrong with the house.

GODLIKE: (March 17, 2010 7:47am)

I can't believe Im siding with the AI, but they've hit the nail on the head. Being an ex Realtor I've got to say they are self serving.

Digme: (March 17, 2010 7:45am)

This Home Decision Wizard software is AWESOME. Thanks guys! I'm going to promote it to my realtors so they can get more shortsale listings.

joecolorado: (March 17, 2010 7:39am)

shame shame shame on NAR-If you think that Realtors are exempt from this fee reduction think again, you are just further down the pike than appraisers and brokers, but its coming, and if you consider that appraisers and brokers will back you up, think again as there wont be any appraisers of brokers worth a damn to help you in your efforts, & those that are active will remeber this act of treachery.I am so disappointed in the myopic momeygrabbing of NAR. Protect your own and screw everyone else seems to be the motto, BUT as I have said all along, appraisers and brokers need to protect themselves against associations that dont include non members in deliberations and now the NAR has taken their 30 pieces of silver.We need to have a voice of our own,how can we get this effective not just statewide but nationwide?

Boingk: (March 17, 2010 7:28am)

We are now like a baseball league being coached by ex-hockey players and regulated by the Mixed Martial Arts Council. Anything goes. He who moans the loudest wins.

charlottehousehunter: (March 17, 2010 6:49am)

We're in the short sale biz and the lender always has a 3rd party conduct the BPO or appraisal. I'm not a fan of BPO's since, in North Carolina, the seller (bank) can only pay the agent who is to list the house a fee. Therefore, there is a underlying sentiment that if the listing is good enough, we'll get screwed on the BPO. Likewise, thanks to the AMC's, some of the appraisers are not much better - driving in from 2-3 counties away and without MLS access. Personally I'd like appraiser b/c they're not our competition. Also, some BPO agents aren't up on the latest pricing trends as they don't actually sell real estate, instead choosing to sell themselves for gas and food money

MtgDude: (March 17, 2010 6:39am)

I think FNMA,FHLMC, FHA, and VA should consider accepting BPO's as valuation for all home loans. Just make sure the listing nor selling realtor do the BPO, right? LOL

Deedie: (March 17, 2010 6:29am)

Oh MY! What are the AMCs going to do now?

Clulessdad: (March 17, 2010 5:53am)

TD hawk-are you sending your opinion to the NAR board?

TD Hawk: (March 17, 2010 5:18am)

Disclosure: I'm a former mortgage originator and a current Realtor. I agree with the appraisers. First, punt entirely the BPO in favor of an actual appraisal. If the government wants to call it something new and make it shorter and less comprehensive, let it be so since we all know that most appraisals are more heavily slanted toward the sales comparison approach. But agents are definitely NOT suited to property valuation because they're too incentivized to sell. Some agents are just too dumb to do a proper valuation but, aside from that, how many of us know listing agents who merely price at whatever the seller wants just to get the listing? Unfortunately, enough of them to discredit the Realtors doing things professionally and properly.

Jersey Girl: (March 17, 2010 5:17am)

Clulessdad: Maybe people are selecting Zillo in the poll to get a rise out of people. :)

Clulessdad: (March 17, 2010 5:14am)

Jersey Girl-I agree that agents and bpo's should not be part of any transaction. I have seen a recent transaction where exactly the situation Frank and Brian told us in the daily and it occurred with an agent getting a property from a shortsale at 70% of market and then flipping it for a cool $70K profit. Her husband bought it and she was using her maiden name. I agree with you 100%. I was just surprised that anyone voted for Zillow!

Clulessdad: (March 17, 2010 5:07am)

I have to go study for 1 of the 3 state LO tests that I need to take. But a final word. This BPO policy is just one of the many stupid things this government is doing to screw up things. I like many of the people in this country are PO'ed at the stupidity and arrogance of our elected representatives and the lobbyists who run this country. If we need appraiser independence, we need elected official independence free from any lobbying efforts. I for one will not re-elect any incumbent-NONE OF THEM! We need a change- a big time change.

Jersey Girl: (March 17, 2010 4:59am)

Clulessdad: When brokers do BPOs are they seeing the subject and all comps? Are they inspecting the subject interior/exterior and measuring the subject property to verify square footage? Are they looking inside the subject to see if there is a flood in the basement or roof caving in? Are they verifying zoning? Seems to me you are weary of Zillo indicating values just like appraisers are weary of brokers doing it. Hmmmmm.

Clulessdad: (March 17, 2010 4:52am)

I can't believe that 8% of the votes are voting for Zillow in the poll. (At 5am Pac) Must be Zillow employees, because NO ONE believes Zillow values, no one. How can you value a property without seeing it and the comparable sales? No algorithm can possibly value functional obsolescence or neighborhood desirability, or even views. Brian and Frank-obviously 8% of our industry still needs to be purged out. We haven't gotten rid of all the bad ones yet. OMG!!!

Jersey Girl: (March 17, 2010 4:45am)

jlaun: I'm sure you know the saying "a few bad apples spoil the bunch". I have seen some bad appraisals out there recently but like any other industry...I've also seen bad brokers, agents, etc. It's everywhere! Yes, appraisers are suppose to drive by the comps. But we do rely on what realtors put in MLS (even photos) because it is the most widely known resource we have. I had one recently where the realtor listed a comp with a garage. I drove by the comp and saw no garage, however it's typical in that area to have rear access to a lower level built in garage. So is an appraiser suppose to believe what the realtor lists in MLS or now expected to go drive by the rear of the comps??? I called the realtor to verify but did not get a return call until 4 days after I submitted my report. He said it had no garage. Oy ve. Anyway, thanks for the support.

Clulessdad: (March 17, 2010 4:42am)

The herds have been decimated for the brokers and appraisers, but the RE agents still are finding ways to make a lot of money. Listing agents are making it mandatory to have Buyers approved by Direct lenders only ( smells of a kickback, doesn't it?) Now, agents are the valuation experts. Why don't we just have the listing agents do the appraisals as a BPO in ANY transaction? Screw the appraisers and screw HVCC. Agents know best! All the ethical agents out there should be upset at this. You need to police yourselves, otherwise you will have the same plight as the brokers and appraisers. You are next on the banks list of endangered species.

Clulessdad: (March 17, 2010 4:36am)

With lenders needing to retain 5% of the loan, wouldn't that completely end the era of any wholesale?

jlaun: (March 17, 2010 3:33am)

As a Realtor I agree that only appraisers should be doing the valuation to maintain independence. I have found that unfortunately with many BPO's new agents or ones without any knowledge of the area are doing them. At the low amount offered for BPO's I find the issue has been way too high of values compared to low values. With appraisals since HVCC though we have had the same problem with inexperienced or out of area appraisers. In their case we have been getting extremely low appraisals and I had one actually tell me that he is never going to be blamed for giving too high a value. Some are using the lowest valued comps whether they make any sense or not. For example I had a home on Tampa Bay compared to one on a pond with no adjustments for the waterfront difference. In this case the MLS listing said there was a dock with access to Tampa Bay, however the dock was at a private marina a couple of miles away. It seems many appraisers are not even driving by the comps.

Ezradams: (March 17, 2010 3:20am)

This link will lead you to a site with a listing of those 24 states: http://www.appraisalinstitute.org/newsadvocacy/downloads/BPOStateLaws.pdf

Ezradams: (March 17, 2010 3:16am)

Appraisers: Check and see if you are located in one of the 24 states where BPO's are only legal for the listing of a property. Don't just stand by and let Realtors steal your business. If located in one of the "protected" states fight back through your state appraisal board! And, most importantly, when asked to do a BPO let the client know that you are doing a valuation on the property and get FULL FEE!