OVERVIEW: BPO VENDOR RULES AND TOLERANCES The intended purpose of a BPO is to provide an opinion of pricing of a property at a given time, based on facts regarding the location, other sold and listed properties that share similar location and characteristics (comparables), and surroundings. Do not allow yourself to be influenced by a subject s list price. This is your price opinion. If the evidence suggests a different price than the listing implies, state your case and defend it with the comps and commentary that you provide. SUBJECT PRICING AND GENERAL REQUIREMENTS Condition and transaction type must be reported accurately. Clients view errors here as misrepresentation a serious offense. Price range must be as tight as possible. List and sale prices should be bracketed by comps, and if not, explained in commentary. If there is a wide price range and/or all comps having the same condition rating, condition (both subject and comps) must be accurate and consistent with photos provided. If ownership is a condo, all comps must also be condo s. If the BPO is for condo/pud HOA data is required. If leased/rented or multi-family, include rental amount(s) in commentary. May be estimated if necessary. [Fannie only:] If subject is ordered as interior (FBPOI) on vacant lot you must notify Vendor Manager before proceeding. PHOTOS Front, street scene and address verification required. When actual address differs from BPO there must be substantial commentary as to how the address was confirmed and what the actual address is. Source of address confirmation document must be uploaded. Subject If subject is in gated community some clients require agent to obtain access letter from Pro Teck. Always check Special Instructions for details. Provide subject photos of any positive influence items, for example golf course or ocean view. If house # unavailable, two forms of additional verification required and commentary. [Fannie only:] Interior reports require subject rear photo Comps Comp photos are required. Health, Safety or Photo(s) of any Health or Safety issues. All issues must be explained in commentary. Repair Issues Photos of any damage, even if damage is not recommended for repair. UPLOADED DOCUMENTS Disclosure addendum [NV only:] BPO must contain a disclosure stating that the supplied opinion is not an appraisal of the market value of the property. The disclosure may be an attachment or a note in the report s comment section. LISTING AND SALES HISTORY Prior 36 month listing history and sales transfers for subject property (even if not through MLS). For sales, must include list date, list price, and days on market. If BPO value is supported at values above or below the current list value, substantial commentary is required to support why the current list price cannot be supported. [Chase only:] Must include subject prior sale date and price, even if not through MLS. Prior Listings / Sales [Fannie only:] All subject MLS activity within past 12 months must be provided and all sales within 36 months. [Fannie only:] MLS sheets for subject and comps uploaded are required. [Fannie only:] Status date is the pending date. Date of the last price/status change. If no price/status change then the current list price must be same as original list price. [Fannie only:] If the difference in as-is and as-repaired is equal to the repair costs we MUST 1 of 5 PT-R-0012
NEIGHBORHOOD DATA Neighborhood Low/High Values Number of comp sales/listings Neighborhood boundaries APN Zoning Classification Number of comparable properties Sale to list price ratio HOA INFO Total Number of Units GRID ITEMS Distance have commentary supporting the 1:1 Return on Investment (ROI). [Fannie only:] Price Conclusion Commentary you will need to explain how opinion of value was determined. A Comment on which two comps were given most weight to opinion of value. Value range of subject neighborhood must be provided and must be bracketed by the comparable(s) unadjusted and adjusted values. [Chase only:] Neighborhood price range of sales/listings: This must reflect the price range of **ALL property sale/listing** within the defined neighborhood boundaries (not just the comparable properties.) Please do not mix property types. (Fannie] Values must bracket all comps and subject sold and listing prices. [Chase only:] This must be the total number of **ALL property sale/listing** within the defined neighborhood boundaries (not just comparable(s). [Chase only:] Please do not mix property types. [Chase only:] Neighborhood boundaries must be subjects actual boundaries (does NOT have to encompass all comps, however must comment if a comp is outside of neighborhood boundaries.) The boundaries must be fully documented using North, South, East, West boundaries. For example: Subject neighborhood consists of Main St to the north, two miles south to Highway 95, Elm St to the west and the Town Park to the east. [Chase only:] Commentary must be provided addressing any comparable used across major boundaries or outside the described neighborhood. Cannot be blank. If non-existent, extensive commentary required. [Fannie only:] Zoning classification must be fully stated. For example Residential R1 [Fannie only:] Sales and listings value range data must be unique to each time frame. [Fannie only:] Should be (for example) 97%, not 3% [Chase only:] Required value. If unknown, this must be explained in commentary. Most proximate with similar location appeal comps must be provided. For subjects in urban areas: o All comps within the same city [Chase only:] Also same zip code, or extensive comments must be provided. o.50 mile max. between subject and comparable [Chase only:] 1 mile, or extensive comments must be provided. For subjects in suburban areas: o 1 mile max. between subject / comp o [Chase only:] Comps must be within same city/zip, or extensive comments provided o At least 1 listing and 1 sale comp within same city For subjects in rural areas: o 5 mile max between subject / comp o [Chase only:] Comps must be within same city/zip, or extensive comments provided o At least 1 listing and 1 sale comp within same city 2 of 5 PT-R-0012
Location List Price List Date Sale Date Days on Market (DOM) Style Property Type Units Bed rooms / Bath rooms Gross Living Area (GLA) Basement Lot Size Year Built Garage Condition If unable to meet any of these distance tolerances, you must explain in commentary. All comps should share positive/negative features. If not they must be commented on and/or adjusted. If any comp is outside neighborhood boundaries, you must provide comment. If any comp is outside neighborhood boundaries, you must explain in commentary. Must include relevant locational influences that have significant impact on subject s marketability. Each comp must have clear commentary explaining its location marketability to the subject. View: At least 1 comp must have a similar view to subject. Any comps lacking the view must either be adjusted (positively or negatively) or have commentary explaining why adjustment is not needed. Must have Original Listing Price Comment on any unusual price changes or extensions Must have Original Listing Date Within six months of BPO, or be explained in commentary. [Chase only:] Suburban/urban must be 6 months [Chase only:] Rural must be 12 months, at least one sale must be 6 months > 12 months requires Pro Teck approval DOM must be stated on case The estimated marketing time as requested by client and provided on report must be supported by the comps DOM. Comps should be representative of the local market. So if comps are less than 90 days, you must acknowledge this on report, we suggest that subject value be targeted on the higher end of the value range. A minimum of 1 comp must equal subject style. Unlike property styles must have commentary explaining how the different styles compete with each other and support the opinion of value. Comps must match. If not possible, contact your Vendor Manager. Comps must be similar (multiple dwelling units only) Unit count must be accurate. If 0 is provided, report will generate as a vacant lot. A comment is required if the comparable is more than 1 +/- bedroom and bath count If you need to make an adjustment, do not also adjust for GLA. Above grade living area only should be used for GLA. Comps should be consistent with above grade living area. +/- 20% of subject (or provide comment) Comps with greater than 100 sf. variance must have adjustments or commentary explaining why no adjustment is necessary. Below grade finished or unfinished area is NOT to be included in the gross living area (GLA) but should be noted in the remarks. Similar to subject on at least 1 comparable +/- 20% of subject (or provide comment) Comps with greater than 20% +/- variance must have adjustments or commentary explaining why no adjustment is necessary. Must be actual age. Effective age is not acceptable. Address effective age in commentary. Subject > 40 years, comp within 20 years of subject Subject > 3 < 40 years, comps within 10 years of subject Subject < 3 years, comps must be within 3 years of subject [Chase only:] Comps that break the following rule must have commentary: o Subject > 15 years, comps must be within 30% subject age and at least 2 must be within 10 years o Subject < 15 years old, comps within 5 years of subject Equal or similarly comparable to subject. If subject average/good comps must be average/good, otherwise comment. If subject is fair/poor then both fair/poor and average/good comps must be provided in order 3 of 5 PT-R-0012
Information Source Transaction Type Comments to properly support the as-is (fair/poor) and as-repaired (average/good) values. Poor ratings must have comments Condition must be supported with commentary and photos. A minimum of 1 comp must be equal. If you cannot locate a fair or poor condition sale or listing, use 3 sales and 3 listings in good condition and subtract the total amount of repairs for the as is value, and comment as to your search parameters. [Fannie only:] Detailed definitions for the six condition ratings allowed are provided in QC-R-0044 Fannie Mae Condition & Quality Ratings. These must be applied accurately. [Fannie only:] If subject MLS indicates repairs are needed, please upload the interior MLS photos. If none are available, please comment on report what MLS stated for repairs needed, however do not provide repair estimate for unseen damages. Excellent: new construction, 1-5 years effective age, New construction / updated (modernized) Good: Maintained / no physical depreciation or no noted deferred maintenance Average: Minor cosmetics/functional but lacks recent updates Fair: Exhibits deferred maintenance / run down Poor: Only used when dwelling is uninhabitable Must provide data source used for verification. Fannie only:] Subject data source should be uploaded. Fair Market and REO are acceptable. Pending sale data (for active comps only) are acceptable. Shorts sale listings and sales should only be used if they compete directly in line with nonshort sale properties. All comparable(s) must have commentary which must explain why the comp was chosen. It is not acceptable to cut & paste identical commentary for multiple comps. [Fannie] Commentary, with focus on Price Conclusion Commentary you will need to explain how you determined your opinion of value. Comment on which two comps were given most weight to your value and why. 90-120 MARKETING PRICE Suggested List Price/ Suggested Sale Price As Is and As-Repaired values must be supported by comparable(s) [Chase only:] The math has to equal. The as is value plus repairs must equal the repaired value. If no repairs, as is and as repaired need to be the same. [Chase only:] Estimated land value is required. If condo or zero lot-line enter $1.00. [Fannie only:] Both as-is and as-repaired prices must be supported by the market and comparable(s), regardless of what the repair costs are. Therefore the repair costs need not equal the difference in as-is and as-repaired price, instead, these must each be reasonable figures for the subject market and supported by the comp data and commentary. [Fannie only:] If the difference in as-is and as-repaired is equal to the repair costs we MUST have commentary supporting the 1:1 Return on Investment (ROI). COMMENTARY You must comment on location, which unlike proximity also includes external influences. Comments may be based on local knowledge or what you can see from aerial maps. Comp comments cannot be MLS comments alone or identical canned commentary. Provide adequate commentary on each comp explaining why you have rated comp inferior/superior/equal to subject. Commentary should be as descriptive as possible and not just repeat what can be read from the grid: o Wrong: Comp 1 is 2 bed and 1 bath and inferior in GLA o Right: Comp 1 is lower in GLA but this is offset by its superior location near park, adjusted accordingly 4 of 5 PT-R-0012
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