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APPRAISAL VERSES BPO
September 9th, 2008 3:43 PM

BROKERS PRICE OPINIONS ARE VERY VALUABLE WHEN ONE WANTS TO LIST HIS/HER HOUSE.  IF THE BROKER IS VERY CAREFUL, HE/SHE WILL TRY TO CONSIDER THE BEST PRICE TO PLACE ON THE SUBJECT TO CREATE A WILL TO BUY AND THE HIGHEST PRICE THAT A SELLER WOULD LIST WITHOUT OVERPRICING TO KILL A BUYERS WANT.  SOMETIMES THE BROKER WILL UNDERLIST THE PROPERTY FOR A QUICK SALE.  THIS IS INTERESTING IN THAT THE BROKER IS TYPICALLY PAID A COMMISSION ON THE SALE.  BY UNDER PRICING FOR A QUICK SALE, THE BROKER IS ACTUALLY CUTTING HIS/HER INCOME IN SELLING AT A REDUCED PRICE. 

IN MISSISSIPPI, BPO'S ARE LISTING TOOLS ONLY.  IF YOU PERFORM A BPO FOR A FEE, THEN IT IS CONSIDERED AN APPRAISAL AND HAS TO BE COMPLETED IN A MANNER TO PASS THE UNIFORM STANDARDS OF PROFESSIONAL PRACTICE. (USPAP)  AN APPRAISER IS A DISINTERESTED THIRD PARTY AND THE OUTCOME OF THE VALUE DOES NOT AFFECT THE INCOME OF THE APPRAISER AS HE/SHE IS PERFORMING THE WORK FOR A STATED FEE.  THE APPRAISER CANNOT GET A FEE ON A PERCENTAGE OF THE OUTCOME OF A VALUE.  THERE ARE MANY REASONS WHY A CERTIFIED APPRAISAL IS MUCH BETTER THAN A BPO  BUT THIS MATTER OF THE APPRAISER NOT BEING A PARTY OF INCOME ON THE OUTCOME OF THE VALUE CONCLUSION IS A GOOD REASON WHY ONE SHOULD GET AN APPRAISAL VERSES A BPO.  MORE ON THIS LATER......


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Posted by David CRAFT on September 9th, 2008 3:43 PMPost a Comment

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