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REAL ETHICS by Steve Stazel | July 2009 | Index of all Real Ethics columns
Standard of Practice 11-1: Few agents aware of important CMA rule
This month, I would like to bring to your attention a Standard of Practice of which very few of us are aware.
It is important that you know about Standard of Practice 11-1 because the Colorado Real Estate Commission (CREC) has also made a ruling on this subject. Before you read it, be aware that NAR tells us: “Don’t let your CMA be confused with an appraisal.” As 11-1 says, this does not apply to you when you are doing a CMA in order to get a listing or when you are helping a buyer arrive at an asking price. The purpose here is to alert anyone who may be using your CMA to value the property that it is NOT an appraisal. If a friend asks you to do a CMA on a deceased relative’s house, this would apply.
STANDARD OF PRACTICE 11-1
When REALTORS® prepare opinions of real property value or price, other than in pursuit of a listing or to assist a potential purchaser in formulating a purchase offer, such opinions shall include the following:
1. Identification of the subject property
2. Date prepared
3. Defined value or price
4. Limiting conditions, including statements of purpose(s) and intended user(s)
5. Any present or contemplated interest, including the possibility of representing the seller/landlord or buyers/
tenants
6. Basis for the opinion, including applicable market data
7. If the opinion is not an appraisal, a statement to that effect
I would suggest that – instead of number seven above – you include a statement the Colorado Real Estate Commission requires in this situation. Rule E-42 says you must include the following language in your CMA: “The preparer of this evaluation is not registered, licensed, or certified as a real estate appraiser by the state of Colorado.” E-42 and number seven above are so similar that I think you kill two birds with the same stone when you delete NAR’s number seven and include Rule E-42 as number seven.
Each month, the Aurora Outlook features RealEthics, a column by Steve Stazel devoted to explaining Code of Ethics issues for members. The comments stated in this article are those of the author and do not necessarily represent the views of the National Association of REALTORS®, the Colorado Association of REALTORS® or the Aurora Association of REALTORS®. Ultimately, a hearing panel of the Professional Standards Committee determines whether a violation of the Code of Ethics has occurred on a case-by-case basis. These comments should not serve as the foundation of any ethics complaint, arbitration request or response.
If you have an ethical concern or an issue you would like
to see addressed, please call Stazel at (303) 773-3333 or e-mail him at
stazels@msn.com. The comments of this article reflect the understanding and
opinions of the author and do not represent an official expression of policy by the National Association
of REALTORSŪ.
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