Frequently Asked Questions

Legal Hotline FAQ

A blog of the most frequently asked questions to the Maryland REALTORS Legal Hotline.

Cindy Sellers
Cindy Sellers
Cindy Sellers's Blog

Is it legal for a Maryland real estate licensee to prepare a Broker Price Opinion for a fee?

A Broker Price Opinion (BPO) is typically requested of a real estate licensee when a property has been foreclosed on, is about to be foreclosed, or has in some other way entered ownership inventory of a "third party" such as a lender, etc., and the new or prospective owner seeks a valuation.  To quote Juliet Capulet, "What's in a name?  That which we call a rose, by any other name would smell as sweet."  Here, although you may believe you are being asked to produce a BPO, the information requested is clearly a Competitive Market Analysis (CMA).  Neither the Maryland Real Estate Brokers Act nor the Code of Maryland Regulations (COMAR) makes any reference to a BPO.  Under Maryland law if a licensee visits and photographs property, and compares it to other properties that have recently sold to recommend a marketing price, it is a CMA.   
In our opinion, these requests are for a CMA and are no different from any other request for a market analysis.
According to COMAR, an appraiser’s license is not required for a real estate licensee to prepare a CMA.  As you are probably aware, a CMA must comply with Maryland law, which includes the disclosure provided below for all CMA’s:
“(1) A licensee may prepare a competitive market analysis of a specific property for a client, prospective client, or customer. The analysis shall include the following statement printed conspicuously and without change on the first page:
This analysis is not an appraisal. It is intended only for the purpose of assisting buyers or sellers or prospective buyers or sellers in deciding the listing, offering, or sale price of the real property.
(2) If a licensee includes a property in which the licensee has an interest as one of the comparables, that fact shall be disclosed to the client, prospective client, or customer.”
Such requests are no different from any other consumer's request for a market analysis.  It makes no difference if this is being done within or outside of the listing process.  The agent's analysis is identical, using the same tools and data that an agent would use for any CMA.  If a REALTOR® prepares a CMA for a seller or buyer, which sets forth the price range of the property, we highly recommend she keep in her files a copy of the CMA and documentation of the properties used in preparing it.  This is good business practice.
Finally, because the licensee is paid a fee for this service, under Maryland law, as with any other salesperson or associate broker compensation, the fee must run through the broker. 

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