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Everett “Vic” Knight Reappointed

Governor Beverly E. Perdue has reappointed Everett “Vic” Knight of Raleigh to the Real Estate Commission for a term ending in 2015. Knight has been a Commission member since 2009.

This article came from the October 2012-Vol43-2 edition of the bulletin.


Walter “Walt” F. Crayton, Jr., Appointed to Commission

Walter “Walt” F. Crayton, Jr., of New Bern has been appointed to the Commission by Governor Beverly E. Perdue. The appointment, as the Bulletin went to press, is for a three-year term through July 2015. He succeeds former Vice Chairman Alice L. Mosteller of Waynesville.

This article came from the October 2012-Vol43-2 edition of the bulletin.

New BPO Laws, Rules Adopted; Effective October 1, 2012

The North Carolina General Assembly recently enacted important amendments to both the Real Estate License Law and the Appraisers Act regarding the extent to which a broker may perform a broker price opinion (BPO) or comparative market analysis (CMA) for a fee. The Real Estate Commission has adopted temporary rules implementing the License Law changes, effective October 1, 2012.

The Primary Law Changes

A “non-provisional” broker whose license is in good standing and on active status may prepare a broker price opinion (BPO) or comparative market analysis (CMA) and charge and collect a fee for the opinion.  The BPO may now be performed for a fee for a variety of persons and entities for a variety of reasons, not just for actual or prospective brokerage clients. Note, however, that a provisional broker (i.e., a broker who has not completed all postlicensing courses and thereby removed his or her “provisional” status) may no longer perform a BPO or CMA for a fee for anyone.  (The Appraisers Act previously allowed any real estate licensee to perform a CMA for a fee, but only for an actual or prospective client or for property involved in an employee relocation program.)

A broker who performs a BPO for a fee must provide the BPO in writing, estimating only the “probable selling or leasing price” of a property (not the “value” or “worth” of a property).  The BPO must NOT be referred to as a “valuation” or “appraisal.”  A broker may NOT prepare a BPO for an existing or potential lienholder (e.g., mortgage lender) where the BPO is to serve as the basis to determine the value of a property for the purpose of originating a mortgage loan, including first and second mortgages, refinances or equity lines of credit.

A “broker price opinion” and a “comparative market analysis” are defined as synonymous terms in both the Real Estate License Law and Appraisers Act.

Standards for Performing a BPO

The Commission’s rules set out the standards for performing BPOs and require that the broker:

• have knowledge of, and access to, market data in the subject property’s local area;

•  exercise objective, independent judgment;

• inspect the subject property, unless the client expressly waives an inspection in writing;

• use methodology (analysis of comparable sales and/or income analysis) that is appropriate for the particular assignment;

• select comparable sold or leased properties and make necessary adjustments;

•  include information about local market conditions and each method used in deriving the estimate of probable selling or leasing price; and

• explain the basis for any range in probable selling or leasing price when the higher figure exceeds the lower figure by more than ten percent.

Most of the standards addressed in the Commission rules for performing a BPO/CMA are not new!  The Commission has for many years applied these standards to any CMA/BPO performed by a licensee, whether or not the CMA/BPO is performed for a fee, and these standards are required to be taught in prelicense and postlicense courses.

BPOs/CMAs Performed for NO FEE

Any broker (non-provisional or provisional) has always been permitted to perform a BPO/CMA for any party when NO FEE is charged, and this continues to be the case under the revised law and rules.  Note that the Commission does not consider compensation of a broker for general brokerage services under a brokerage agreement to constitute a “fee” under the BPO law.  Such services include the provision by a licensee of a CMA or BPO.  Similarly, the possibility of entering into a brokerage agreement (and earning a brokerage fee) does not constitute a “fee” when a licensee performs a CMA/BPO for a prospective client without charging a fee for the CMA/BPO.

It is important for licensees to remember, however, that the Commission expects every CMA/BPO performed by a licensee to be performed in a competent manner and without any undisclosed conflict of interest, even if no fee is received for the CMA/BPO.  Thus, as a practical matter, a licensee performing a CMA/BPO for no fee should still look to the standards described in the new Commission rules for guidance regarding the proper performance of a CMA/BPO.

Education on BPOs in Update Course, CE Electives and Real Estate Manual

The BPO law and rule changes are addressed in the current Real Estate Update Course, which licensees are urged to take as soon as possible.  The Update coverage does not, however, attempt to address how to properly perform a BPO/CMA. For instruction on the proper performance of BPOs/CMAs, licensees are urged to attend a CE elective course on this topic that has been updated to reflect the recent law/rule changes.  Updated coverage of proper performance of BPOs/CMAs will also be included in the next edition (2013-14 edition) of the Commission’s North Carolina Real Estate Manual that will be available in January 2013. The complete law and rule changes may also be found on the Commission’s Web site at www.ncrec.gov.

This article came from the October 2012-Vol43-2 edition of the bulletin.

Property Disclosure Form Revised; Effective January 1, 2013

The Residential Property and Owners’ Association Disclosure Statement has been revised to make it easier for users to complete.

Required for all properties placed on the market on or after January 1, 2013, the revised form replaces the current form’s use of lead-in and subordinate questions with 37 independent questions.

The first 31 questions of the new form, presented in a slightly different sequence, cover the conditions and characteristics of both the property and dwelling to be sold. The content of the questions remains essentially unchanged from the current form with the following exceptions:

•  the date the dwelling was constructed, rather than the age of the structure;

• an expanded list of possible materials used to make the exterior walls;

• the date the roof was installed, rather than the age of the roof;

• if the fuel is stored in a tank, whether the tank is above or below ground, and whether it is leased or owned by the seller;

• a shared well included as a possible water supply source;

• whether the owner has knowledge of the number of rooms permitted for a septic system, and if so, the number of permitted rooms;

• problems with “appliances that may be included in the conveyance” rather than “built-in appliances;”

• “structural additions or other structural or mechanical changes” rather than “additions or other structural changes to the dwelling(s) to be conveyed;”

• whether the owner has “been notified by a governmental agency” regarding violations of zoning ordinances, restrictive covenants, or building codes, including the failure to obtain proper permits for changes or improvements.

The last 6 questions pertain to only those properties subject to a HOA, and remain essentially unchanged. As has been the case, the questions offer the options of answering “yes” or “no,” where appropriate, or “no representation.”

For those properties placed on the market prior to January 1, 2013 that require a corrected Disclosure Statement, the new form should be used to make any updates.

The form is available on the Forms page of the Commission’s Web site.

This article came from the October 2012-Vol43-2 edition of the bulletin.

Benjamin Cone Re-elected Chairman; Everett Knight Elected Vice Chairman

Benjamin Cone III of Raleigh has been re-elected Chairman and Everett “Vic” Knight of Raleigh elected Vice Chairman of the North Carolina Real Estate Commission, it was announced by Miriam J. Baer, Executive Director.

Knight succeeds former Vice Chairman Alice L. Mosteller of Waynesville for the remainder of the 2012-2013 term.

A member of the Commission since 2007, Chairman Cone is Managing Director of Milestone Partners, LLC, in Charlotte. He has held management positions in the textile and commercial furniture industries.

He is a graduate of the University of North Carolina with a Bachelor of Arts in Economics and North Carolina State University with a Bachelor of Science in Textile Management, Magna Cum Laude.

Knight, a licensed broker since 1984, is also a certified appraiser and the owner of Chapel Hill Appraisals and Consultants. He previously was broker/owner of Century 21 Vic Knight Realty in Hillsborough for 10 years.

A native of Burlington, Knight graduated from North Carolina State University with a BS in Civil Engineering and worked internationally for Bechtel Corporation for several years. He was a licensed General Contractor in North Carolina.

Knight is currently a director of the National Association of REALTORS®, a past president and member of the board of directors of the North Carolina Association of REALTORS®, and past president of the Chapel Hill Board of REALTORS® and the Triangle Multiple Listing Service. He is a Continuing Education Instructor for the Real Estate Commission and the North Carolina Appraisal Board, and serves on the Board of Trustees of the Appraisal Foundation.

Knight has two daughters, “Krystle” Gray VanDeventer and “Victoria” Scarlet Knight and is a member of Hillsborough United Church of Christ.

This article came from the October 2012-Vol43-2 edition of the bulletin.