Broker Price Opinions
Posted on January 2, 2002 by Michelle Lind, Esq.
Can a real estate broker legally be compensated for preparing a Broker Price Opinion (“BPO”) on real property in Arizona? The answer is found in the statutes governing the licensing and certification of real estate appraisers.
To perform an “appraisal” a person must be licensed.
Any person who performs a real estate appraisal or appraisal review, who is not licensed or certified under this chapter and who knowingly assumes or uses any title, designation or abbreviation likely to create the impression of licensure or certification by this state . . . is guilty of a class 1 misdemeanor. A.R.S. §32-3638
An “appraisal” or “real estate appraisal” is defined as:
A statement independently and impartially prepared by an individual setting forth an opinion as to the market value of real property as of a specific date and supported by the presentation and analysis of relevant market information. A.R.S. §32-3601(1)
Only a licensed or certified appraiser can be compensated for performing an appraisal.
A. All real estate appraisals and appraisal reviews performed in this state shall be performed only by individuals licensed or certified in accordance with the requirements of this chapter. . .
B. No person other than a state licensed or state certified appraiser may receive a fee for a real estate appraisal or an appraisal review of real property in this state.
A.R.S. § 32-3603
Real estate brokers and agents are exempt from these statutory appraisal licensing and certification requirements. A.R.S. § 32-3602(1) states:
This chapter [Chapter 36, which contains the appraisal statutes] does not apply to:
A real estate broker or salesperson who is licensed in this state and who, when acting as such, gives an opinion as to the price of real estate if this opinion is not referred to as an appraisal.
Therefore, there is no prohibition from a real estate licensee, when acting as such, from being compensated for performing a BPO.i
iNote: The NATIONAL ASSOCIATION OF REALTORS® Code of Ethics, Standard of Practice 11-1 addresses the items that must be included in a BPO unless the requesting party requires a specific type of report or different data set.