July 12, 2011 – The Hawai‘i Association of REALTORS® has announced that Real Estate Licensees are now able to charge fees to prospective sellers for Broker Price Opinions (BPO’s).
Cook Walls Inc. has elected to NOT charge our prospective sellers for BPOs as a matter of providing service to our clients. Do you know the value of your property? You should. Contact us for a No Obligation. Free Brokers Price Opinion.
If you would like to learn more, the following information was provided by the Hawai‘i Association of REALTORS®. You are advised to seek and retain your own legal counsel for any legal advice or interpretation of the law.
Real Estate Licensees Are Permitted to Prepare Broker Price Opinions (BPO’s) for a Fee.
House Bill 320, S.D.1 was signed into law on July 11, 2011, as Act 212, and took effect upon approval.
Why could I previously not prepare a Broker Price Opinion for a fee? According to the Hawai‘i Real Estate Appraisal Division, it interpreted the appraisal licensing rules to provide that if a real estate licensee performed a Broker Price Opinion (“BPO”) and received compensation other than the normal fee rendered in connection with the sale of the property, the real estate licensee may have been performing an appraisal.
What does the new law do? The new law exempts a real estate licensee from the requirement for licensure as an appraiser subject to certain conditions. Thus, a real estate licensee can provide an opinion to clients or third parties, including financial institutions and asset management companies, and allows the payment of compensation for the BPO except where the licensee receives compensation related to the sale of property, i.e. a commission.
Are there any restrictions in preparing a BPO? Yes, the opinion as to the estimated price of real estate shall state that it is not an appraisal.
Are there any restrictions on a real estate licensee in preparing a BPO? Yes, the real estate licensee shall not present themselves as a certified or licensed real estate appraiser. Also, if the real estate licensee receives compensation related to the sale of property, the licensee shall not receive any additional compensation, fee, or other consideration for providing an opinion as to the estimated price of that property. For example, if a real estate licensee lists a property and receives a commission for the sale, they cannot charge an additional cost to their client for preparing a BPO. Or, if a real estate licensee is paid for a BPO and then later receives a listing commission on the property, it is recommended that the amount of the BPO(s) be credited to the Seller at closing.
What should brokerage firms do now? HAR recommends that brokerage firms adopt new language in its company Policy and Procedure manuals to address allowing BPO for a fee.