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Understanding the new BPO law

By: Kim Shindle on in  | 

Licensed real estate agents will be specifically affected by the legalization of Broker Price Opinions in Pennsylvania’s Real Estate Licensing and Registration Act. Act 75 (formerly House Bill 863) defines BPOs and how they may be conducted in certain circumstances. The act also increases pre-license education requirements.

The act goes into effect on Aug. 28, however, in order to fully implement these changes, the State Real Estate Commission will need to create educational, regulatory and policy criteria. Once criteria is established, real estate schools will need to develop new content and have it approved.

While BPOs will be legal as of Aug. 28, there are two major caveats. First, any licensee who wants to perform a BPO must complete certain prerequisite education requirements. And second, a BPO may only be performed for certain purposes and can’t be used for others.

In addition, a licensee must hold a license for at least three years and have completed at least three hours of continuing education on BPO topics during the current or prior license period. The same requirements must be met by a broker or associate broker before being able to sign off on a BPO performed by a salesperson.

It’s also important to understand that just because BPOs are legal doesn’t mean all brokers allow them in their practices. Like any other licensed service, the ultimate right to set rules belongs to the broker. Brokers have the authority to prohibit BPO practice within an office, or to establish whatever legal limits they wish. Agents who want to do BPOs should check with their brokers to ensure that they are willing to allow those services to be performed in the brokerage. Brokers are encouraged to check with their errors and omissions insurance providers to ensure that adding BPO services to a brokerage will be properly covered.

For a detailed FAQ which outlines the RELRA amendments and implications, please visit PAR’s website. If you have questions, please email PAR.

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Comments (13)

Comments

  • Melanie Franceschi   July 20, 2018 at 8:51 am

    What is a BPO? How does it work for a licensee?

    Reply to Melanie Franceschi
  • Arch Autenreith   July 20, 2018 at 8:53 am

    Good article, Kim

    Reply to Arch Autenreith
  • Melanie McLane   July 20, 2018 at 9:36 am

    I think that the NAR course PSA (Pricing Strategy Advisor), which is 7 hours long (and I helped write) would qualify for this education. It was designed to help agents perform CMAs and BPOs, and understand the appraisal process.

    Reply to Melanie McLane
    • Hank Lerner, Esq.   July 20, 2018 at 10:01 am

      I just want to be clear that the commission has not yet established its criteria for this BPO education, so it is premature to focus in on any particular course offering. They are aware of the PSA course (and other pricing-related courses) that have been approved for CE and may be looking to those outlines for content suggestions, but it is possible that they will want content – such as a review of the substance of this bill – that is not included in any currently-approved course.

      Reply to Hank Lerner, Esq.
  • Walter Johnson   July 20, 2018 at 10:15 am

    This is a slippery slope ! Agents should only do CMA’s for valuation assistance in listing property. All other opinions of value should be left to appraisers who have countless hours of licensee requirements and twice biannual CE requirements. There are so many variables that have to be part of the due diligence of appraisers that I feel would be missed by agents, that could create more E&O issues for Brokers.

    Reply to Walter Johnson
    • Patricia Cephas   August 18, 2018 at 1:11 pm

      I tend to agree with Walter. I smell liability issues here. I’m more comfortable with leaving appraisal-type issues to professional appraisers who are licensed to appraise!

      Reply to Patricia Cephas
  • Arch Autenreith   July 20, 2018 at 1:03 pm

    Wow. I didn’t realize that the Broker need to meet the same requirements also. Makes sense but just wasn’t aware of it.

    Reply to Arch Autenreith
  • Beth Scheid   July 25, 2018 at 9:47 am

    Is this going to be mandatory to take yet more classes? I am all for education but if the Broker has absolutely no interest in BPO’s then is a course still going to be required?

    Reply to Beth Scheid
  • Kingsley   October 4, 2018 at 9:20 am

    The fact that opinion is in the title suggests just that….opinion. Again, another instance of too much interference by government.

    Reply to Kingsley
    • Joe post   December 30, 2018 at 8:26 pm

      Exactly. I couldn’t agree more. I’ve been doing bpos since the 90’s with no problems now I have to find a broker willing to allow bpos. Current broker has an appraisal department so he won’t. Now have to split with a broker my $50 fee, really? Government overreach 101.

      Reply to Joe post
  • Toni   November 19, 2018 at 5:57 pm

    Is there a estimated deadline date for Pennsylvania to disclose the specific education requirements for completing BPO’s in PA?
    The commonwealth is already way behind other states in simply understanding this valuation resource for lending institutions. Pennsylvania is also taking away the opportunity for agents to learn and stay abreast of the values in their markets while earning income, thus staggering the overall economy. I hope they can come up with something soon.

    Reply to Toni
    • Hank Lerner, Esq.   November 20, 2018 at 10:38 am

      Unfortunately, we don’t have anything specific at this time. I can tell you that over their past couple of meetings the Commission has reviewed drafts of proposed regulations and course content, but the process cannot move forward until they have formally adopted both. The next meeting Commission meeting is in mid-December, so we will have better information at that time.

      Reply to Hank Lerner, Esq.

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