Understanding the new BPO law
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.