Can a provisional broker prepare a Comparative Market Analysis?
QUESTION: I received an offer from an unrepresented buyer on one of my listings. After presenting the offer to my seller, I informed the buyer that my Comparative Market Analysis (“CMA” or “BPO”) indicated the offer was at least $15,000 below the probable selling price. The buyer responded that her friend is a brand-new provisional broker, and according to the free CMA her friend prepared, the offer was very near the probable selling price. I was a little taken aback since I thought that provisional brokers were not allowed to conduct CMAs. Am I correct?
ANSWER: No. Although the law does not permit a provisional broker to charge and collect a fee for preparing a CMA or BPO, a provisional broker may prepare a CMA for free. The NC Real Estate Commission does not consider compensation paid for general brokerage services under a real estate agency agreement to constitute a “fee” under these circumstances.
It is strongly recommended that if a provisional broker prepares a CMA that they follow the requirements of N.C.G.S. § 93A-83 and 21 NCAC 58A .2202. Under section 93A-83(b), a broker may prepare a CMA for “a third party making decisions or performing due diligence related to the potential listing, offering, sale, option, lease, or acquisition price of a parcel of or interest in real property.” Rule .2202 of the License Law sets out standards that a broker must comply with in preparing a CMA.
Agents should note that the reason a provisional broker cannot charge a fee is due to the concern that the provisional broker will not have either adequate instruction or sufficient experience to properly perform and prepare a CMA. The Commission expects every CMA to be performed competently and with all conflicts of interest disclosed. BICs should therefore take measures to ensure that CMAs are being done in compliance with the License Law, especially if they allow provisional brokers to conduct the analysis.
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