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“Restricted Use” Appraisals are now enjoying a new level of popularity due to the changes in mortgage rules and are in many ways, superior to BPOs. Broker Price Opinion Companies
Once upon a time, many appraisers provided free preliminary research on property values, with the idea being that if a property “comped out”, the person requesting the research would use that appraiser to perform the full summary appraisal that lenders require. These reports could go for $ 250 to $ 400, depending on the assignment.
In 2009, mortgage rules changed. Because appraisers who do preliminary research for loan officers now have little chance of getting the full appraisal assignment should a property “comp out”, the few that are still providing this type of research are finding that they must charge separately for this service.
“Restricted Use” appraisals are much more sophisticated than the preliminary research that was done before the change in rules and are intended for client use only.
This type of report might contain only brief statements of information significant to the appraisal, and might have little stated regarding the data considered or the analyses conducted, then again, it might be very detailed..
The appraiser who writes such a report is responsible to keep a work file which contains the data and analysis used to support his or her estimation of market value. The appraiser’s record keeping has to be sufficient to be able to produce a summary report if necessary. Broker Price Opinion Companies
A good “Restricted Use” appraisal report might contain the following information:
–A description of the subject property including the house and lot size, age, number of bedrooms and bathrooms, exterior and roof construction materials and the existence of pools, basements and other major amenities.
–Market research including the number of recent sales and price range of similar properties in subject market.
–The number of current listings and price range of similar properties in subject market
–The addresses and descriptions of recent sales in the subject market that are most similar to the subject.
–A map that displays all of the properties used in the report
–The criteria for choosing recent sales used as comparables
–A commentary to give the reader better understanding of market value.
–An expert opinion of market value dated and signed by a residential appraiser
“Restricted Use” appraisals solve many non-mortgage needs and typically cost $ 50-$ 100, comparable to a BPO. They can also be completed in 24-48 hours, again, similar to a BPO. Well then, what is the difference?
–An appraiser is not interested in your listing. They have no incentive to paint a rosy picture of what your house might fetch in the open market.
–Appraisals must be written in accordance with national guidelines (“USPAP”) and can legally conclude market value. BPOs can not.
–The typical real estate agent sells 4 houses a year. The typical appraiser is in regular contact with multiple lenders and is immediately aware of any changes in the mortgage industry. Unless you have a cash buyer, you need an appraiser’s expertise. Broker Price Opinion Companies
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