I got an offer the other day to "review" broker price opnions (BPOs).  A firm told me that they had appraisers doing this work and that they were extremely busy.  The caller indicated that if I agreed they could provide me with about 75 BPO "reviews" per day and that at $ 5.00 each I could pocket $ 375 every single day and never even leave my desk.  They told me that they expected their "review" appraisers to complete at least 75 BPO reviews a day, but that if I was quick I could do even more. 

It seems like only yesterday I was writing an article about the potential for problems for financial institutions and others using broker price opinions (BPOs) as a basis for lending.  I find it interesting that now, after real estate agents have had their way with the system, that they now want to drag appraisers back into it the mix as a way to bolster BPO credibility.

Any appraiser who falls for this line and takes the BPO "review" work is doing so at great risk of loss.  When you complete an appraisal on a million dollar home you have risk associated with its completion and accuracy.  When you review 75 BPO's with a total loan amount of around 15 million every day to you think that you may have increased your liability?  Do you think that your E & O insurance carrier is going to agree that BPO reviews are an appraisal service? 

When you consider the fact that the BPOs are being completed by agents unqualified to work on even a basic appraisal report and that you are expected to spend about 6 minutes to finish each "review" do you think that maybe you have increased your potential liability?  How much of a "review" do you think anyone can you do in 6 minutes?

It's my opinion that the use of the work "review," which has a specific meaning in the appraisal industry, also leaves the door open to appraiser liability.  If you "review" a BPO are you required to comply with the Uniform Standards of Professional Appraisal Practice (USPAP)?  I know the easy answer is no, since a BPO is not an appraisal, but you have to ask yourself "why are they hiring an appraiser if they don't need one?"  Maybe its because your signature on the "review" lends a great deal of credibility to the BPO.

It will be interesting to attend the regulatory hearings when the appraisers who have "reviewed" BPOs are brought in to explain why they thought they were being hired to do this work.  My question for them would be "how did you think that you were protecting the public, which is the purpose of licensing, when you were completing thousands of BPO reviews each month?"  It will be interesting to see what process they followed, what verifications they made and how they reached their conclusions in the 6 minutes that they allocated to each BPO. 

If you had a chance to include pages and pages of explanation and "qualifiers" regarding your appraisal "review" you may have at lease made an attempt at protecting the public, but do you think that the business ordering the "reviews" was going to allow that?  No way.  If you spend more than 6 minutes on average looking at the agent's material you couldn't meet the minimum volume requirements.

As a final argument against appraisers doing BPO "reviews" I would note that appraiser participation in the BPO fiasco is an insult to the appraisal profession.  Do you really want to be part of a real estate agent / NAR scheme to control valuations?  It's against everything that most appraisers believe in, and I believe that if appraisers will simply step back BPOs will fail as an alternative to appraisals given time.

Needless to say, I refused the BPO "review" work.