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REAL ETHICS by Steve Stazel | April 2010 | Index of all Real Ethics columns
A little-known Standard of Practice
What follows is a rarely-discussed Standard of Practice of which we should be aware.
Standard of Practice 11-1 DOES NOT apply when we are doing a CMA in order to assist a buyer to determine an offering price or with a seller in order to arrive at a listing price. It usually comes into play when we are doing a CMA as a favor for another person or when we are doing a CMA for a fee.
I believe the purpose of this Standard of Practice is to notify anyone using this CMA that the preparer is not a certified appraiser. The Standard of Practice is as follows.
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 statement of purpose(s) and intended user(s)
5. any present or contemplated interest, including the possibility of representing the seller/landlord or buyer/tenants
6. a basis for the opinion, including applicable market data
7. if the opinion is not an appraisal, a statement to that effect
Colorado Real Estate Commission Position Statement 24 also addresses this issue. It states (in part) that brokers should include the following wording in their CMA: “NOTICE – the preparer of this appraisal is not registered, licensed, or certified as an appraiser by the state of Colorado.” (Even though the Real Estate Commission uses the word “appraisal,” you might want to change that to “CMA.”)
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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