Broker Price Opinions, Value Reconciliation, and other Alternative and Preliminary Valuation Products

The Bureau of Real Estate Appraisers (BREA) receives ongoing inquiries from our licensees with questions regarding whether they can develop an opinion of value by doing Broker Price Opinions (BPOs), desktop reconciliation of values, or a variety of other kinds of alternative and/or preliminary valuation reports. The answer to these questions can be found in the Uniform Standards of Professional Appraisal Practice(USPAP) and Title 10 of The California Code of Regulations.

The 2016-2017 edition of USPAP defines the word "appraisal" as:

USPAP is clear that when developing an opinion of value, regardless of the reporting format (BPO, Reconciliation of Value, etc.), an appraisal is being performed.

Title 10 of the California Code of Regulations, Section 3701, specifically requires that every holder of a license shall conform to and observe the Uniform Standards of Professional Appraisal Practice (USPAP). Anytime an opinion of value for real property is reported by an appraiser licensed by the State of California, that appraisal must comply with USPAP! Therefore, prior to accepting any assignment, regardless of the format in which the opinion of value is provided, the appraiser must familiarize themselves with the applicable portions of USPAP and must develop, report, and maintain records according to the applicable USPAP rules and standards.

Furthermore, if you are a registered Appraisal Management Company (AMC), Title 10 of the California Code of Regulations, Section 3577 requires adoption of reasonable procedures designed to ensure that all appraisal assignments completed for use in Federally Related Transactions by its independent contractor or employee appraiser licensees are performed in accordance with USPAP. Although, delivering a USPAP compliant report is ultimately the responsibility of the appraiser, an AMC must be cautious about ordering valuation products from State licensed appraisers that are not USPAP compliant.

The business model of the appraisal industry continues to change and new valuation products are, and will continue to be, developed and requested in lieu of USPAP compliant appraisals. A California State licensed appraiser, when acting as an appraiser, is required to comply with USPAP. In some cases, supplementing the requested reporting forms will be required to be in compliance with USPAP. In other cases, when compliance with USPAP is not possible, turning down the assignment may be the only option. Remember - standardized forms are not always USPAP compliant, however, USPAP compliance is always a requirement for a licensed appraiser!