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I did a BPO last week for a Raised Ranch w/ mother in law unit in the basement. The house has been "remodeled" by some owner over the years as 2 units, separate entrances, but the city & county has no record of the basement finish and has zoning clearly disallowing it as a duplex.
The Asset Manager requested that I re-do the BPO as a duplex, because the bank had an appraisal done that shows it as a duplex. If the City & County notices that it is being used as a duplex, I believe they would redtag it.
My perspective is, as a realtor, that I give honest advice to my clients. If the client doesn't want to pay attention to what I have to say, that is their choice, and I don't have to participate with them any further on the project.
I am totally willing to give up my fee on the BPO, that is not an issue for me. I don't sell out my integrity for $65.00.
My questions, for discussion: Do you run in to these kinds of problems with Asset Managers? How do you handle those issues? Why would an Asset Manager ask for an opinion and then disregard the information?
I have dealt with this before as an Asset Manager. Your best option would be to explain to the Asset Manager that the home is an illegal duplex and provide proof that the city does not allow it to be a duplex. The tax records should still show it as a single family, so provide that as well.
I completely agree that you should not compromise your integrity and provide a false opinion just because they ask.
The most likely reason they have disregarded your information is because they believe the appraiser over you. That appraiser, possibly, did not do his job and merely wrote his appraisal based upon only viewing the house. That is just a guess because you can't be sure without actually seeing what the appraiser wrote.
Another reason is because they aren't aware that it cannot be a duplex and therefore cannot be sold as one and are asking you to correct your BPO because of this.
Give them the facts as direct as you can and let them deal with it.
I have been asked one time to change comps at the request of the BPO Company's client. After I finally found the ones they wanted (the bank's listing agent had a lot of wrong info in the MLS), they were actually of lower value. I used them but put a disclaimer in the BPO (which I sure was removed by the BPO company) that the comps were under valued, had been on the market more then 500 days each and all the wrong or no info in the the MLS.
I then sent my rep with the BPO company an email to never ask me to do that again. And then explained exactly why those comps were not found the first time. They were close enough to be usable anyway, never could figure out why the bank wanted a lower value. But they made a lot of noise about $5,000 in values.
It sounds to me that you have taken the proper approach on this one however this is going to happen from time to time, Tony Rosales and Steve have both made the thought process easy to understand. Bottom line, if you can prove that it is a nonconforming property there should be a reasonable hit to the price opinion, it's up to you to clearly define that reasoning and adjustment, if the asset mgr insists on you adjusting the value I would still document both values in every note section that you can. One for conforming and one for non conforming if it is not clear which.
I have have several BPO's questioned over the past year because of a lower appraisal from a BPO factory, most of the time I have to point out what the appraiser/agent missed. In one case over $150k when an appraiser hit a small 1960's built home in a neighborhood behind a mall at $125k in Sarasota, Fl. when in fact it was a small beach cottage on the barrier island of Siesta Key that was 6 houses from white sand. even in a down market it would sell at $275K.
Many companies that I deal with are the companies that I can and will get listings from so it is extremely important for me to be as accurate as possible and adjust where needed. As REO brokers a portion of or score is determined by our BPO price opinion and what the property actually sold for, if there is too much of a spread in either direction it will have a negative affect.
I for one appreciate an agent that will take the time to give an accurate opinion and can state reasons for adjustments, especially if they are doing a second opinion on one of my properties. Keep up the good work!