A Nevada Real Estate Commission task force crafted new language Wednesday for proposed regulations on broker price opinions, a method used by real estate agents to give buyers and sellers an estimate on the price of a home.
The final version, adopted after three hours of debate between task force members in Las Vegas and Carson City, states that a real estate licensee “may not knowingly prepare a broker price opinion for appraisal or in lieu of an appraisal for financing or valuation purposes as defined by USPAP (Uniform Standards of Professional Appraisal Practice).”
The proposed changes will be submitted to the Nevada Real Estate Division on its Sept. 23 agenda.
Broker price opinions have become commonly used in the past six to 18 months by banks and mortgage lenders considering approval of foreclosure and short sales, or sales for less than the mortgage owed.
Brokers typically receive $40 to $50 in compensation for their work, far less than the $350 to $400 fee for a professional appraisal. That has created a rift with appraisers, who are required to complete 150 hours of valuation education and training for certification.
It isn’t simply a “turf battle” between appraisers and real estate brokers, said Debbie Huber, a member of the task force’s fact-finding group and a representative of the Appraisal Institute. It’s about protecting consumers, lenders and taxpayers, she said.
Appraisers contend real estate agents have violated Nevada Revised Statutes Chapter 645 when they prepare a BPO for any reason other than to determine a competitive listing or sales price.
“It’s pretty clear the definition in (NRS) 645 allows brokers to do a BPO to list and sell,” said Tony Wren, an appraiser and task force member in Northern Nevada. “Nowhere does it talk about assessing values and all the things appraisers do and they’re not necessarily the same thing.
“There’s no way in the world I can recommend that real estate agents have the right to break the law. They’re not authorized in 645 or 645C,” he said.
Wren said there’s been rampant misuse of BPOs in today’s housing market. Real estate agents are performing them for purposes of mortgage payment reductions, second and third mortgages, divorce cases, tax appeals and home equity lines of credit.
“In the state of Nevada, that is against our law,” he said.
Contact reporter Hubble Smith at email@example.com or 702-383-0491.