The Nevada State Senate's passage of SB 184 redefines the way broker price opinions are used in real estate valuations in the state.
The law, signed today by governor Jim Gibbons, allows broker price opinions (BPOs) for a number of specified purposes including the listing of real property for sale and by potential lienholders on a property. The stipulations eliminate room for BPOs to be used in lieu of an appraisal in determining whether to approve a mortgage loan.
The law provides clarity in the origination process without preventing the use of BPOs anywhere in the process. According to one industry group, there's a certain time and place for BPOs.
"In some situations a full appraisal might be the appropriate product, while in other situations a BPO gives users the information they are looking for," says Real Estate Valuation Advocacy Association (REVAA) president Michael Ramer in a media statement today.
"It is also very common to get a BPO in addition to a full appraisal which gives the end user even more information," Ramer adds. "The key is to match the valuation or pricing tool to the need, and Nevada's legislation now allows users to choose from a full spectrum of valuation tools in appropriate situations."
In the statement, REVAA officials called the state legislation an ideal model for other states to follow in bringing transparency and clarity to the role of BPOs in the mortgage origination process.
Write to Diana Golobay.