In an attempt to save money on property tax assessments, some homeowners are choosing to have the value of their homes recalculated. The least expensive option for achieving this is through a Broker Pricing Opinion, or BPO. However, according to the San Francisco Chronicle, some brokers appear to be lowballing their estimates on bank-owned foreclosures, allowing banks to get the homes off their books in a hurry, but artificially driving down the values of other homes in the neighborhood. While BPOs are illegal in 23 states, the practice is receiving attention at the national level with some calling BPOs “destructive to local markets.”
ft take: The bankruptcy court has already spoken to this issue of a real estate owned property (REO) as NOT BEING a comparable sale to set property values for property which is not being “dumped” by a lender. Further, agents and brokers preparing a BPO must, as licensees under a duty to be honest and truthful, prepare a CMA with comparable properties fully analyzed before giving an opinion. Without supporting data, the opinion is merely a guesstimate and thus a dishonest BPO; it has no basis in reason for being accurate. But do not think for a minute that REO re-sales do not set values in the open market: they do and will continue to do so for a couple of years, minimum. REOs do compete for buyers with private sellers.
See first tuesday CMA forms 318 and 318-1
Also, see first tuesday’s Recent Case Decision article on In re: Serda.
Re: “Why broker price opinions may cut home values” from San Francisco Chronicle
