Aceable Principles 1 combined, Questions
And Complete Answers
BPO broker's price opinion.
process used by a hired sales agent to determine the potential selling price or estimated value of a
real estate property.
Reasons for a BPO.
1. The people in the home have asked to refinance the home and the lender does not want to pay
for a full appraisal, but they do want to have some assurance that the home is valued at or above
what the loan will be.
2. The people in the house are about to be foreclosed on and the lender wants an inexpensive
estimate of value.
Approaches to value Cost to replace: a method of estimating the value of a property by
determining how much it would cost to replace the building or other improvements, minus the
cost of depreciation, plus the value of the land itself
Sales comparison approach: a property appraisal method that estimates value by comparing the
subject property to the sales prices of similar properties in the same market area
, Aceable Principles 1 combined, Questions
And Complete Answers
Income approach: a method of estimating the value of a property by applying a rate of return to
the net income it produces
Reconciliation appraiser will compare estimates they made based on the cost approach,
sales comparison approach, and/or income capitalization approach.
Sales Comparison Approach This approach bases its valuation on the local real estate
market. The appraiser is concerned with local market demand for the property.
CMA Comparative Market Analysis.
A report that compares the prices of sold homes that are similar to the subject property. Not the
same as an appraisal
NAR Standard of Practice 11-1 When REALTORS® prepare opinions of real property
value or price (like a comparative market analysis), other than in pursuit of a listing or to assist a
potential purchaser in formulating a purchase offer, such opinions shall include the:
Identification of the subject property
Date prepared
Defined value or price
, Aceable Principles 1 combined, Questions
And Complete Answers
Limiting conditions, including statements of purpose(s) and intended user(s)
Disclosure of whether and when a physical inspection of the property's interior was conducted
Any conflicts of interest
Any present or contemplated interest, including the possibility of representing the seller/landlord
or buyers/tenants
Basis for the opinion, including applicable market data
If the opinion is not an appraisal, a statement to that effect (Amended 1-01)
OLD CAR The fiduciary duties an agent owes a client have been organized into six
categories or areas of responsibility. A great way to help you remember the fiduciary duties is the
acronym OLD CAR.
Obedience (if legal)
Loyalty (100%)
Disclosure (full)
Confidentiality (forever)
Accounting (forever)
Reasonable care
, Aceable Principles 1 combined, Questions
And Complete Answers
Fiduciary Duty: Obedience While an agent will understandably want to use their expertise
to guide the client to a good decision, ultimately the final decision is the client's alone to make.
Letting a client make an unadvisable choice can be one of the hardest things to do — but that's
just what obedience entails.
Fiduciary Duty: Loyalty An agent has a duty of loyalty to their principal. Their job is to
represent their principal's best interests, even over their own
Fiduciary Duty: Disclosure License holders are required, whether working as an agent for
someone or not, to disclose "material facts." Material facts are facts, oftentimes related to the
condition of the property, that might cause a buyer or seller to change their mind about a
transaction.
The disclosure of material facts is a duty of disclosure owed to everyone, but a fiduciary duty of
disclosure goes beyond that. It is a duty to disclose EVERYTHING an agent knows or learns
about related to a transaction that would serve the interest of their client. Some of this, of course,
would NOT be disclosed to the other party in the transaction.
Fiduciary Duty: Confidentiality The fiduciary duty of confidentiality is connected quite
closely to that of loyalty and disclosure, in that private information given to the agent by the
client will be kept secret (unless the client wants to have the information shared).
And Complete Answers
BPO broker's price opinion.
process used by a hired sales agent to determine the potential selling price or estimated value of a
real estate property.
Reasons for a BPO.
1. The people in the home have asked to refinance the home and the lender does not want to pay
for a full appraisal, but they do want to have some assurance that the home is valued at or above
what the loan will be.
2. The people in the house are about to be foreclosed on and the lender wants an inexpensive
estimate of value.
Approaches to value Cost to replace: a method of estimating the value of a property by
determining how much it would cost to replace the building or other improvements, minus the
cost of depreciation, plus the value of the land itself
Sales comparison approach: a property appraisal method that estimates value by comparing the
subject property to the sales prices of similar properties in the same market area
, Aceable Principles 1 combined, Questions
And Complete Answers
Income approach: a method of estimating the value of a property by applying a rate of return to
the net income it produces
Reconciliation appraiser will compare estimates they made based on the cost approach,
sales comparison approach, and/or income capitalization approach.
Sales Comparison Approach This approach bases its valuation on the local real estate
market. The appraiser is concerned with local market demand for the property.
CMA Comparative Market Analysis.
A report that compares the prices of sold homes that are similar to the subject property. Not the
same as an appraisal
NAR Standard of Practice 11-1 When REALTORS® prepare opinions of real property
value or price (like a comparative market analysis), other than in pursuit of a listing or to assist a
potential purchaser in formulating a purchase offer, such opinions shall include the:
Identification of the subject property
Date prepared
Defined value or price
, Aceable Principles 1 combined, Questions
And Complete Answers
Limiting conditions, including statements of purpose(s) and intended user(s)
Disclosure of whether and when a physical inspection of the property's interior was conducted
Any conflicts of interest
Any present or contemplated interest, including the possibility of representing the seller/landlord
or buyers/tenants
Basis for the opinion, including applicable market data
If the opinion is not an appraisal, a statement to that effect (Amended 1-01)
OLD CAR The fiduciary duties an agent owes a client have been organized into six
categories or areas of responsibility. A great way to help you remember the fiduciary duties is the
acronym OLD CAR.
Obedience (if legal)
Loyalty (100%)
Disclosure (full)
Confidentiality (forever)
Accounting (forever)
Reasonable care
, Aceable Principles 1 combined, Questions
And Complete Answers
Fiduciary Duty: Obedience While an agent will understandably want to use their expertise
to guide the client to a good decision, ultimately the final decision is the client's alone to make.
Letting a client make an unadvisable choice can be one of the hardest things to do — but that's
just what obedience entails.
Fiduciary Duty: Loyalty An agent has a duty of loyalty to their principal. Their job is to
represent their principal's best interests, even over their own
Fiduciary Duty: Disclosure License holders are required, whether working as an agent for
someone or not, to disclose "material facts." Material facts are facts, oftentimes related to the
condition of the property, that might cause a buyer or seller to change their mind about a
transaction.
The disclosure of material facts is a duty of disclosure owed to everyone, but a fiduciary duty of
disclosure goes beyond that. It is a duty to disclose EVERYTHING an agent knows or learns
about related to a transaction that would serve the interest of their client. Some of this, of course,
would NOT be disclosed to the other party in the transaction.
Fiduciary Duty: Confidentiality The fiduciary duty of confidentiality is connected quite
closely to that of loyalty and disclosure, in that private information given to the agent by the
client will be kept secret (unless the client wants to have the information shared).
