North Carolina Tosses Illegal Broker Price Opinion

Lawsuit moneyThe North Carolina Court of Appeals on Sept. 6 affirmed a trial court’s exclusion of a broker price opinion from evidence because it reported market value instead of price.
In the case before the court, a real estate broker prepared a 124-page BPO that reported the pre-taking value of a 240-unit apartment complex as $15.338 million and a value after the taking of $11,603,733, a difference of $3,734,267. A jury returned a verdict and determined $350,000 was just compensation for damages arising from the taking of the property. The court found that the broker’s report “repeatedly states that it is an opinion of the fair market value of the property … rather than the probable selling price.” The court found that the licensed real estate broker, who was not a licensed appraiser, “is not permitted to prepare ‘a valuation appraisal.’”
The court noted that the state’s Real Estate Licensing Law allows a real estate broker to prepare a broker price opinion or comparative market analysis and to receive a fee for that service. A BPO or CMA is defined in statute as “an estimate … that details the probable selling price or leasing price of a particular parcel of or interest in property.” The statute also states, “A broker price opinion or comparative market analysis that estimates the value of or worth … rather than sales or leasing price shall be deemed to be an appraisal and may not be prepared by a licensed broker … and may only be prepared by a duly licensed or certified appraiser.”
Read the decision in the case of North Carolina Department of Transportation vs. Mission Battleground Park.
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