MAR E-NEWS:  NOVEMBER 20, 2002 - BPO's:  Questions have recently been raised about broker price opinions ("BPO's") or "drive-by" opinions of value which are being sought by some lenders, particularly for home-equity purposes and are being performed by real estate licensees.  The questions concern whether or not these can be done by licensed real estate professionals, and whether an appraisal license or certification is required.  After review of the applicable Maine statutes and rules, and consultation with the Director of the Maine Real Estate Commission, which recently entered into a consent decree on one aspect of this issue, it appears that with certain caveats, the practice of doing BPO's without an appraisal license is acceptable.  The caveats are these:

1)  the real estate licensee must hold a broker or associate broker license, not a sales agent license (32 MRSA sec. 14004),
2)  the broker or associate broker may not offer an appraisal or opinion of market value on real estate in a transaction where that broker or anyone else in the agency is going to receive a fee (32 MRSA sec. 13251-A),
3)  the written opinion prepared by the broker or associate broker must contain the following language: "This opinion or appraisal was prepared solely for the client, for the purpose and function stated in this report and is not intended for subsequent use.  It was not prepared by a licensed or certified appraiser and may not comply with the appraisal standards of the uniform standards of professional appraisal practice."
4)  the opinion or appraisal may not be offered on a transaction where the value of the real estate exceeds $250,000, thereby satisfying the generally accepted definition of "federally related transaction", and
5)  if the opinion of value is prepared for a client, the licensee must make a careful and thorough analysis and interpretation of all factors affecting the value of the real estate (chap. 330, sec 4).

MAR E-NEWS:  DECEMBER 5, 2002 - CLARIFICATION ON BROKER PRICE OPINIONS (BPO's):  There has been some confusion generated by the recent update published in MAR E-NEWS on BPO's.  Item #2 was addressing the conflict of interest provision in the real estate brokerage license law.  It does not mean that you cannot get paid for doing a BPO.  The statute says that a broker may not knowingly provide an appraisal or opinion of market value on real estate in a transaction where the broker, or any other licensee in their agency, is to receive a fee on that transaction.  In other words, if the agency is receiving a commission on the transaction, a broker from that agency cannot do an appraisal or opinion of value in the same transaction.  The $250,000 threshold in item #4 actually applies to the "transaction value".  For purchase transactions this would mean the market value of the real estate.  For refinance transactions this would be the loan amount.