16A — September 13 - 26, 2013 — Mid Atlantic Real Estate Journal
www.marejournal.com
A ppraisal I nstitute
The Coalition of Pennsylvania Real Estate Appraisers Resistance to PA’s “BPO Bill” Gaining Traction thanks to Coalition of PA Real Estate Appraisers
In early April of this year, we reported that legislation that would permit licensed salespersons and brokers to expand their current roles as advocates for buyers and sellers into providing opinions of value for a myriad of important real estate decisions regarding real estate was being proposed by the PennsylvaniaAssociation of Realtors (PAR) and was being circulated in Harrisburg. To no one’s great surprise, at the behest of PAR, Senate Bill (SB) 869 was officially intro- duced into the Pennsylvania Senate later that month. What was surprising to many was
the swiftness and effectiveness with which the Coalition of Pennsylvania Real Estate Ap- praisers (CPREA) responded. More work needs to be done, though, and the CPREA needs a concerted effort and addi- tional financial support from all real estate appraisers in Pennsylvania in order to win this important fight. Background Pennsylvania’s Real Estate Licensing & Regulation Act currently allows real estate brokers and salespersons to perform Comparative Market Analyses (CMAs) only for the purpose of determining the
asking/offering price for se- curing a listing. Broker Price Opinions (BPOs) are not legally recognized in PA law. However, a BPO is equivalent to a CMA. Neither CMAs nor BPOs are authorized outside of the real estate brokerage context (i.e., to set a list price or get a listing). If SB 869 is enacted into law as it has been introduced, it will forever alter real estate valuation in Pennsylvania. All users of real estate valuation services deserve the assurance that the opinion they are being provided is accurate and cred- ible, and has been developed by someone who is competent,
qualified and independent. SB 869 specifically prohibits lend- ers from utilizing BPOs in any mortgage loan transaction: why is that? Because these assur- ances cannot be guaranteed. Currently under the proposed bill, mortgage loan origina- tion is the only intended use specifically prohibited. Other users of valuation services who are making real estate related decisions deserve the same protections and assurances as lenders: that the opinion they are being provided is accurate, reliable and unbiased. This includes individuals, state and local government agencies and
courts, tax assessment authori- ties, the legal community, and on and on. Real estate valuation re- quires extensive training, edu- cation and supervision. Even though Pennsylvaniamandates that real estate appraisers take hundreds of hours of educa- tion, accumulate thousands of hours of experience, and pass a rigorous comprehensive exami- nation to become certified, SB 869 would allow licensed sales- persons to provide BPOs on all types of residential and non- residential property as soon as they become licensed. No valuation education or exami- nation would be required, and no valuation experience would be required; a broker does not even have to be involved for a salesperson to perform a Bro- ker Price Opinion! Actions by the Coalition of Pennsylvania Real Estate Ap- praisers In December 2012, a group of stakeholders (sales profession- als, appraisers, and lenders) met to discuss the proposed leg- islation before it was formally introduced in the State Senate. Soon thereafter, the Coalition of Pennsylvania Real Estate Ap- praisers (CPREA) was formed by the five Pennsylvania Chap- ters of the Appraisal Institute and other interested appraisal professionals to be the Voice of Responsible Real Estate Valu- ation in Pennsylvania. As a result of this meeting, and in the spirit of attempt- ing to reach a compromise to which all stakeholders could agree, the CPREA developed a good-faith counterproposal that would allow for the limited expansion of the ability of bro- kers and associate brokers to provide CMAand BPO services outside of the traditional real estate brokerage context. In a move that was contrary to the spirit of stakeholder compromise, the state’s largest organization of real estate sales professionals completely dis- missed the proposed changes, offered no counterproposal, and advanced this controversial legislation before the Legis- lature. The bill was formally introduced in the Pennsylvania Senate on April 18, 2013 as Senate Bill (SB) 869. In response, the CPREA mo- bilized quickly. An extensive grassroots lobbying campaign was undertaken, and the re- nowned and respected firm of continued on page 24A
The Coali�on of Pennsylvania Real Estate Appraisers was formed in late 2012 by the five Pennsylvania Chapters of the Appraisal Ins�tute and other interested appraisal professionals to be the voice of real estate valua�on in Pennsylvania. We are a non-profit organiza�on whose goal is to ensure the protec�on of all consumers by promo�ng the use of accurate, reliable, and independent real estate valua�on services. This goal is furthered by ac�vely monitoring relevant legisla�ve ac�ons at the state level that affect the valua�on community and the public.
Promo�ng Responsible Real Estate Valua�on
CPREA’s Objec�ves
• Work to promote the appraisal profession and its image to the general public and to all users of appraisal services.
• Ini�ate discussion and analysis of issues affec�ng professional appraisers.
• Monitor poli�cal ac�on with the intent to influence legisla�on, regula�on and public opinion toward the appraisal profession, by iden�fying the Pennsylvania appraisal profession as an iden�fied, collec�ve voice in the legisla�ve and regulatory debate.
• Represent a professional appraisal “consensus” to the Pennsylvania Legislature and relevant state regulatory agencies.
• Provide a legisla�ve and regulatory liaison to associated professions and industries.
• Provide ongoing, �mely informa�on about relevant legisla�ve and regulatory events.
• Create and maintain a method of funding through contribu�ons to make the coali�on self-sufficient.
489 Devon Park Drive, Suite 309 Wayne, PA 19087 Contact@CPREA.org www.CPREA.org
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