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By: Kim Shindle on in  | 

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.

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

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

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

    Reply
    • July 20, 2018 at 9:28 am Kim Shindle says

      Melanie, I would urge you to read the frequently asked questions at https://parealt.rs/2JGjoNo. They define a broker price opinion (BPO) and what you need to know.

      Reply
  • July 20, 2018 at 8:53 am Arch Autenreith says

    Good article, Kim

    Reply
  • July 20, 2018 at 9:36 am Melanie McLane says

    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
    • July 20, 2018 at 10:01 am Hank Lerner, Esq. says

      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
  • July 20, 2018 at 10:15 am Walter Johnson says

    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
    • August 18, 2018 at 1:11 pm Patricia Cephas says

      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
  • July 20, 2018 at 1:03 pm Arch Autenreith says

    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
  • July 25, 2018 at 9:47 am Beth Scheid says

    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
  • October 4, 2018 at 9:20 am Kingsley says

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

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

      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
  • November 19, 2018 at 5:57 pm Toni says

    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
    • November 20, 2018 at 10:38 am Hank Lerner, Esq. says

      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

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