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“Customary and Reasonable” Fees

Here you can share information and discuss strategy with your colleagues regarding “Customary and Reasonable” Fees.

87 Responses to “Customary and Reasonable” Fees

  1. Mike Ford says:

    Don’t want to violate anti trust regs? post your fees on your website and don’t be afraid to be higher than someone else. You can always negotiate.

    I need to update my fee list. Reduce the narratives, since I know a huge national MAI owned factory is undercutting me by about $1,000 per assignment. They do decent work. My conclusion is I must lower my posted commercial fees.

    I will not however lower my SFR fees. These are low for what we are expected to do; and it is to be done honestly, competently and ethically. I charge for what I believe my time is worth.

    Raising expert witness fees to $300 an hour. Last time I charged only $150 an hour with a 4 hour minimum the attorneys laughed and said they could (and did) pay it from petty cash. Obviously that fee was too low to confer any degree of respect. I now charge the higher fee and if I choose to give the client a discount, then they tend to appreciate it more.

    My fee conclusion? Its actually easier to compete in the deep end of the pool than in the more crowded shallow end.

    Charge enough to command respect and insist on being treated with professional respect.

    Do NOT respond to emailed transcription of “underwriter” questions. I want to see the actual underwriter memos-not the AMC clerks interpretation of them.

  2. Edd says:

    sa is right on! So who has tripled their fee and is getting any work?

    And sa, Greg may be an idiot and he certainly needs work on spelling and syntax, but I’m inclined to agree with him. In general appraisers are not very well trained and most don’t put much if any effort into improving their skills beyond CE. Indeed, since you mention McDonald’s, we’ve heard that appraisers and McDonald’s employees are currently in many respects interchangeable. And that is the direct result of a profession without the clout or the will to deal with it. The AQB is making an effort, but it is going to take a long time to clean it up.

    And then, as sa implies, who will want to spend all of the time, money and effort in training to be paid only what is now offered?

    Which will survive? The skilled appraisal profession or this screwball Fannie Mae set up? Any bets?

    I’ll take the profession, but it is no slam dunk.

  3. sa says:

    These are quick estimates…..sorry for any penny errors.

  4. sa says:

    Reasonable Time to create 1 quality report and keeping your hair:6hrs, research/amc revision preference 1hr, insp & comps 2.5hrs, == 9hrs total

    4 reports x52wks = 208 (50%/50%)
    104 @ $300.00fee / 104 @ $450.00fee

    = total $78000 yr

    - 1wk vac (if lucky) + 1 wk to catch up = -3200

    -lost/sick days 1wk if ur lucky? = 1600

    -slow period seasons / no work/ dumped by amc for lower fee appraisers 6wks lost? = -6933

    -supplies 600
    -health ins 9600
    -e&o 600
    -programs/tech repairs(mls, geo, computerm, etc
    – 6900

    -tele -1000

    -gas – 1500

    -auto repair/ wear/ tear -3500

    - auto insur -1500

    -utility -1200

    - schooling -700

    - did i miss anything?

    = $39517

    - uncle sam -5900

    total take home $33590

    savings?? retirement??
    Job security??

    avg home mortgage in the north ease 2500 mnth

    Any experience appraiser would agree these expenses are conservative for ny metro area AND FEES OF 350 – 450 ARE STATED UNREALISTICALY HIGHER THAN AVG AMC FEE. .

    Mcdonalds 15.00 x 40hrs = 600.00

    x 52wks 31200.00

    + 2 wk paid vac
    + pd sick days
    +401k
    +insurance

    - less stress, quality life – priceless

    APPRAISERS FEES NEED TO TRIPLE TO KEEP APPRAISERS IN THIS INDUSTRY

    Greg, your an idiot w/ no business skills, stay in the business, its perfect for you.

  5. Greg says:

    You people are delusionary, name any other profession where the govement or any other body states that we are need to get paid more. It’s only been a few years where a degree was even needed to become an appraiser. Someone on this board states the bust their but to make $75,000 a year. Excuse me, but the rest of the world busts their buts for far less. Appraiser’s need to get out to the real world and see what it really takes to earn a paycheck. You take a few courses and think that you are worth $100,000 a year. I’m sorry but the average appraiser works a few hours a day, hardly ever on weekends and takes extended vacations. If you say you don’t then you are lying or you are infact making $75,000 a year and you should be grateful. Appraiser’s don’t want to take blame for anything, but when brokers were asking appraiser’s to commit fraud MOST of you were doing it and prompted the rise of AMC’s. You created your own reality.

  6. Mark from Indiana says:

    Are Appraisers Too Independent For Their Own Good?

    GUEST POST: Lisa Alvarez, The American Guild of Appraisers 800-660-1835 ext 2. The American Guild of Appraisers Weekly Conference Call When: Every Tuesdays 2pm – 2:30pm Eastern Time Where: 559-546-1000, Password 382795.

    American Guild of Appraisers As a result of the Home Valuation Code of Conduct (HVCC), and the current Financial Reform Act of 2010 (aka Dodd-Frank), appraisers have had to work under difficult circumstances. According to recent statistics, upwards of 80% of lending appraisal assignments are being funneled through Appraisal Management Companies (AMCs). These AMC’s are enforcing unreasonable working conditions on appraisers by unrealistically reducing the completion time for appraisal assignments, adding exhaustive addenda requirements, while reducing in half the typical fee paid to the appraiser.

    Appraisers are now faced with big banks (aided by misguided government interpretation of Dodd-Frank) determining what should be a reasonable and customary fee. Since April 1, 2011, AMCs have been telling appraisers to expect yet lower fees for their services. AMC’s continue to rack up huge profits on the backs of consumers and appraisers. To add insult to injury, the transparency of appraisal service fees to the consumer has become a joke.

    From my experience over the past few years as the legislative liaison for two appraisal organizations, I have come to realize: “The very thing we value, our independence, has been detrimental to our profession.” During the past few weeks I’ve had the opportunity to speak with a multitude of appraisal organizations, state coalitions, AI chapters, as well as individual appraisers. The one constant I hear from leaders of these organizations is that they have a difficult time getting appraisers involved. To quote myself “We are too independent for our own good.”

    National appraisal organizations have been working on the behalf of appraisers for many years. With members spread out between a collective of different organizations, the appraisal industry has had minimal success protecting our profession. We lack the necessary funding to influence legislature at both the state and federal levels. Up to now, other lobbying organizations (lenders and AMCs) have been the Goliath to our David.

    So what can we do? “With so many small organizations representing appraisers, we don’t have a strong and collective voice,” said Coleen Morrison, Standing President of the MD Chapter of AGA. “We needed a voice that we haven’t had for the past 25 years. A voice that allows us to come together so we can be more powerful and better able to represent the interests of appraisers.”

    The American Guild of Appraiser (AGA) /Guild 44 of the Office and Professional Employees International Union (OPEIU)/AFL-CIO, based in Maryland, near Washington, DC, could be our answer.

    The AGA is a non-traditional union that represents independent professionals. The AGA does not engage in collective bargaining, strikes, and does not enforce closed shops. The AGA does not negotiate contracts, does not have shop stewards, and does not have any oversight regarding its member’s work products. What we have is the backing of over 10 million members within the AFL-CIO and 110,000 within the OPEIU. With these numbers, we have a collective voice. AGA will encourage professionalism and communication between all professional appraisal organizations. With the backing of the AFL-CIO we continue to play a vital role in fighting legislation and regulation that supplants and marginalizes the professional appraiser. We are practicing real estate appraisers who are giving up our time and talents for the appraising profession, for you.

    The American Guild of Appraisers is working to further legislation at the state and federal level to better regulate AMC activities and to secure the independent role and compensation of the professional appraiser.

    “We have to fight for the integrity of the appraisal process, as well as to preserve our industry, to stop it from being swallowed up and lost,” said Colleen Johansen, AGA vice president. “We are not going to let that happen, we will fight for our members.”

    Peter Vidi, Guild 44 president states “It’s our mission is to ensure that professionals have a collective voice, whether it’s negotiating a contract or representation on the legislative front. That’s what AGA is all about, and that’s the kind of strong collective voice that the appraisers have as part of Guild 44. The credo of the American Guild of Appraisers is, ‘We Value America’s Future.’

    Appraisers take the first step and join us on our weekly conference call. Let’s start working together with one strong collective voice. If you don’t get involved now, than yes, “we are too independent for our own good.”

    Finger_pointing_027 The American Guild of Appraisers Weekly Conference Call is every Tuesday from 2:00pm – 2:30pm Eastern Time. Call 559-546-1000. The password is 382795 – For more information email: lalvarez@appraisersguild.org , or call 800-660-1835.

    ABOUT THE AMERICAN GUILD OF APPRAISERS/OPEIU GUILD 44

    The American Guild of Appraisers/OPEIU Guild 44 seeks to represent the interests of appraisers, developing a strong presence before the U.S. Congress and each of the state legislatures. By working closely and exchanging dialog with other like-minded organizations, the AGA works to educate consumers about the appraisers’ non-bias, independent role in the value process, while ensuring the accountability of both the appraisal profession and the financial institutions with which the appraiser provides services.

    ABOUT OPEIU

    The Office and Professional Employees International Union represents more than 110,000 members (representing 125,000 employees) in the United States, Puerto Rico, and Canada. OPEIU represents employees and independent contractors in banking and credit unions, insurance, higher education, shipping, hospitals, medical clinics, utilities, transportation, hotels, administrative offices and more. Professional organizations and Guilds affiliated with OPEIU are a diverse group that includes physicians, pharmacists, chiropractors, appraisers, podiatrists, clinical social workers, teachers, and helicopter pilots.

  7. Randall says:

    Joe: So the small Mom and Pop shops have to give way to big corporations? You call yourself an appraisal shop, so why dont amc’s allow trainees perform work, wait, the split-fee appraiser you hire at the low fee(40%-70% ot the actual fee) cant afford to hire a trainee and pay them, or should i say split the fee with them. How are new appraisers going to enter the business if all Appraisers are split-fee appraisers as you try to support your position as an amc. If my understanding is correct dont management conpanies charge the client and not the vendor. This means that amc’s, appraisal management companies(appraisla fee shop) should be charging their client, as the banks are thier clients and not the vendors, as we(the appraiser) are reffered to as by the amc. If you truly an appraiser why do you want to hurt the proffesion so badly by eliminating Appraisers and accepting form fillers?

  8. FJG says:

    ALL: IMPORTANT READ AND REPLY

    I will be meeting with Congressman Mike Fitzpatrick in approximately three weeks to ask for his supoprt in stopping Banks and AMC’s from stealing our appraisal fees and to make sure the consumer gets what they are paying for.

    The Congressman is on the Financial Services Committee.

    It is my belief that this is the final showdown for our profession and I am not giving up on something I worked so hard to build the past 20+ years. Therefore I am personally taking action. Nothing will be Sugar Coated in this meeting.

    You can help me.

    I have created an email address for you to voice your concerns. I will PERSONALLY hand your concerns to congressman Fitzpatrick to further support our position.

    Please do something for your profession. Be professional but direct with your opinion.

    Send to:

    ToCongressmanFitzpatrick@profapp.com

    AMC’s, Lenders and Banks are raking in Millions of dollars off the backs of appraisers. Take five minutes to help yourself today.

    Frank G.

  9. Wendy says:

    I have been working for several AMC’s for years now. Some have been great. I initially signed a contract with contract pricing that we both agreed upon and they pay me in a timely manner. However, there are also some that I have been working for that are progressively getting worse. One in particular does not pay in a timely manner. It takes about 4 months of sending e-mails and leaveing voice mails (because no one answers the phone) to finally get paid – although they do eventually pay. I found out last week that there are only 2 people in their accounting department and they have 1800 appraisers nationwide. They have also begun to haggle on the fees – last week I did an appriasal for them for $390.00 this week they want me to do the exact same type of appraisal for $375.00. I told them that why I could not perform that work for $375.00 & they told me that is all the client would pay. I have let them try to find someone else to do the work. I have been round and round with them – it will not surprise me if they come back to me in a couple of days and ask me to take the assignement for the $390.00 but of course it is a rush now- this has happened several times with them over the past several months. I have asked them to send me a copy of their fee chart and also a copy of the payment policy – as I did not have it in the initiat contract I signed with them – needless to say I still don’t have it. This AMC also gets paid up front for the appraisals – but they can’t seem to pay me in a timely manner. However, they do have the personnel to call and e-mail me constantly wanting to know when the report is going to be turned in – even before it has been inspected. I consistently have a 2 day turn time with all of my customers unless there is something unusual about the subject & then I let them know what is going on. I refuses to rush my work more than that – I have found for myself that if I do then there are mistakes in my report and I’m just not going to do that.
    I also have a company that I have been working for for the past 10 years. I have never had a problem with them until the past year. They too are playing the lets barter for the price of your appraisal. Consistently they call me, ask if I can do the appraisal, send me the order with a $250.00 fee, I tell them to increase the fee or re-assign it, they increase the fee, I do the work, and then I have to go the the accounting supervisor to finally get paid but I have to wait 14 days to call be cause they don’t process payments until 14 days after completion which means I usually call 30 days or so later just to give them the chance to take care of it themselves.
    The whole point of working for the AMC’s for a reduced fee was to not have to go through all of this! I spend more time working on collections now than I ever have and I’m bringing home less. I also have to defend my work against AVM’s that do not take into account the specifics of the subject – not even GLA! So I’m getting questions as to why did I arrive at a particular value when there are sales much higher or lower. If they don’t trust my judgement then don’t hire me! I’ve just about had enough and while I love the work I’m not sure how much more I want to deal with. To put it plainly I am good at what I do and can easily defend my work – which seems I have to do more and more – but I’m not sure its worth it especially given the rising cost of doing business these days.

  10. Retired Appraiser says:

    Sounds like a typical way to tie it up indefinitely. Congrats on your “big win”. Have appraisers learned nothing after being raped for 2 1/2 years?

    Banks own the politicians friends. It’s that simple. If you’re going to win this you need to boycott until you shut down the mortgage market. You could have your lives, your careers, and your ability to call yourself respectable.

  11. FJG says:

    Here is the contact info for Barney Frank:

    Please address the email as follows:

    Mr. Frank, Please stop the THEFT OF OUR APPRAISAL FEES. Revoke the license to steal from your Dodd/Frank Act

    202-225-5931

    Email https://writerep.house.gov/writerep/welcome.shtml

    You must select Mass. from the drop down box and put in zip code 02740.

    Feel free to add your comments as seen fit. Dont be afrais to vent. Its been 3 years of THEFT.

  12. FJG says:

    …WASHINGTON, April 19, 2011 /PRNewswire-USNewswire/ — The American Guild of Appraisers/Guild 44 of the Office and Professional Employees International Union, AFL-CIO met with Representative Barney Frank (D-MA) on April 14 to discuss the Guild’s concerns with the Federal Reserve Board’s Interim Final Rule (Rule) regarding Appraiser Independence.

    …Guild National President Peter Vidi requested that Rep. Frank write a letter to the Federal Reserve regarding the Rule, pointing out its significant deviation from the intent of MRAPLA. “Congressional intent to restate the market survey for Customary and Reasonable Fees was not to include fees paid by appraisal management companies,” said Vidi.

    “…Congressman Frank expressed an interest in doing so,” said OPEIU Director of Organization and Field Services Kevin Kistler, “but has asked his staff to do additional research and report back to him with a recommendation before he makes a final decision as to whether to send a letter, as well as the substance of the letter.”

    You all may want to write Barney Frank, even though you all may not want to. I don’t support caps on fees and government control of fees, but this was interesting news, and thought I would share it with those who are into it.

  13. Retired Appraiser says:

    Here is another article that is semi accurate: http://www.inman.com/buyers-sellers/columnists/kenharney/regulators-take-liberties-with-real-estate-legislation

    Without organization and without an untimatum appraisers will accomplish exactly what they’ve accomplished over the past two years. Nothing

  14. Nancy says:

    The “reasonable and customary fee” MUST be based on the current market value of the appraisal, i.e. how much is being charged the mortgagor/mortgagee for the appraisal service. If the cost for the appraisal to the mortgagor is $500, that is the “market value of the appraisal”, we should all understand “market value” (that is our job, get on the ball people), an AMC insisting on paying the appraiser a fee of $250 for an appraisal that has a “market value” of $500 is definitely in clear violation of the Dodd/Frank ruling. Particularly when the “reasonable and customary fee” was originally around $350.
    I have had homeowners aggressively complain about the appraisal fee, while I am receiving less than I was 2 years ago, the AMC’s are skimming, and need to be reported.
    I’m reading this blog to find ways to accomplish this, and noting AMC’s to avoid, since I’m aquiring new clients whenever possible. There are too many complaints, and not enough information so far.
    My advice is to ignore the “bottom feeding, undercutting appraiser” who is working for $175 or less, pursuing them is hopeless, and may be construed as an antitrust voilation of attempted price fixing. We should all find out what the mortgagor is being charged for that same appraisal, and aggressively report the AMC for violations concerning “reasonable and customary fees” paid the appraiser vs. the actual “market value” that is being paid by the mortgagor for that appraisal.
    The “market value” of an appraisal has increased significantly in the past two years, while the AMC’s are artificially driving the fees down to way below “reasonable and customary”.
    How many of you are on several AMC lists, and have had your banks switch to the AMC that is paying you less? How many of you have been swamped with work and had to turn assignments down, and in the same week had an AMC sending the orders reduce the fee they are paying once again? This type of action is against all laws of supply and demand, the demand should have increased the price, not lowered it, since when does an appraiser receiving plenty of work lower the fee?
    This same AMC is in violation of anti-trust laws, and requires appraisers who want to be on their “prefered appraiser list” sign a document agreeing to accept fees set (and subject to change) by the AMC. I refused to sign it, and was removed from their list, which amounted to no more orders.
    NO AMC should be allowed to do something a group of appraisers would be prosecuted for doing. NO AMC should be allowed to set the fee they are paying the appraiser to less that 10% of the “market value of the appraisal”, yes , you heard me, 10%. A $350 appraisal would cost the mortgagor $385, no more.
    I have found an appraiser database, NOT an AMC, that does just that. The appraiser’s set fee, plus 10% is all they charge, and I hope they will round up all the business in my area aggressively undercutting AMC competition by lowering the “market value”, while paying me what is clearly “reasonable and customary”.
    Good Luck out there in appraisal land, and I hope next time I read this page there will be e-mail addresses and advice on how and where to speed up the demise of the illegal activity of the AMCs.
    Also, if the AMC’s were only allowed to charge +10%, or $190 for a $175 appraisal, they would be out of business quicker than the appraiser, and have much less interest in low balling fees.

  15. George says:

    AMC and bank really screw the appraiser.
    Here’s how one AMC and lender have not only side-stepped the fee question but made a buck.
    I never did much business with ISGN and their primary client which seemed to be Sovereign Bank. When the company was Fiserv…or GAC…you could actually speak English and the person on the other end understood.
    But I digress.
    I knew the Sovereign format, extra comps, extra photos, 1004MC…absurdly low fees. Then I didn’t get any orders for a month or so. No harm, no foul.
    April arrives and I am flooded with orders from ISGN…for 2055s with an attached 1004MC. And somehow they dug up the fee I used to charge for 2055s (which I always thought of as a favor to the lender). I took the first one but they just kept coming and I kept turning them back since I figure it’s an hour’s less work for a fee that’s less than I made in 1994.
    The 2055 proves that the house is still there and that’s it; and yet ISGN and Sovereign Bank think this is a pretty good “work-around” Barney-Frank.
    AMCs are not going quietly to the whipping post. What this one is saying is, “we don’t need appraisals…or appraisers”
    Watch your back!

  16. DR says:

    If the appraisers do not unite and become one voice, I guarantee tha AMC’s will put all of us out of business. Stand your ground! I know one appraiser that takes all the low fee appraisals and has typists do them while he just signs the reports. He is a one appraiser shop and has done 103 appraisals so far this year! Do the math! He is one of many who is helping the AMC’s . As long as we have appraisers like him around producing sub-standard appraisals for low fees the fight with the AMC’s will be long and hard. I just did a appraisal for $325 because I was in dire need. The home owner asked me why my fee was so high. The home owner thought $800 was a bit high. I had to tell him that I could not talk about the fee as it was set by the bank/AMC ! This is BS…

  17. It sounds like we are in another waiting game regarding customary & reasonable fees as noted in Dodd-Frank.

    Key Notes:
    * The minimal timeline set forth in the Dodd-Frank Act indicates that those rules may be promulgated within 18 months of July 21, 2011.

    * After the rules are in final form, States have 36 months to implement the minimum requirements established by the rules for registration and supervision of AMCs. (The ASC may grant States up to a 12-month extension, subject to specific limited conditions set forth in the Dodd-Frank Act.)

  18. Mark says:

    If you want a $200 appraisal thats what I’m going to give you!

  19. Mike says:

    Anyone know the source for settled customary and reasonable fees listed by geographic area? It’s after April 1st and I can’t find out what has been decided on in my area.

  20. Retired Appraiser says:

    Patrick

    I believe you may have nailed it….THE FUTURE OF APPRAISING.

    In the future AMCs will finally be able to justify their 50% fee cut by training new appraisers. Why? Because no appraiser in their right mind will accept the orders.

    Something’s got to give and soon. My guess is that you will begin to see a genuine appraiser’s rebellion begin to form shortly after April 1, 2011.

    For the most part, it’s starting to sink in and even the most clueless appraiser is starting to ask himself why he’s going broke. Pretty amazing. It only took two years for the majority to figure it out.

  21. Patrick says:

    Joe, I have been running my own appraisal firm for over 10 years. As most appraisers will agree, we all had our own clients until they started using AMC’s like yours. I produce quality reports that I will defend in court if necessary. AMC’s are nothing like an “appraisal shop” because I don’t need someone going over my reports with a fine toothed comb and giving me additional stipulations. That is why I am a certified appraiser and not a trainee. If I needed someone to hold my hand, then I would consent to a fee split. Give me back my clients, I’ll get the full fee from them, and we’ll call it even.

  22. Byron says:

    I just don’t get it. We all know that the reasonable and customary fee for a 1004 is right about $400 nationwide. We know it. The lender’s know it. FHA knows it. VA knows it. AMC’s know it. So what’s the problem. Sure there it’s going to be a little higher in some places, and lower in others. But that’s what we all got used to getting over the years, isn’t it? So again, what’s the problem?

    This is America. So AMC’s “Joe”, you have every right to make a buck like the rest of us. But this is the kicker. Why, why why freaking why do we, the appraiser, have to foot the bill. It’s a rhetorical question so no need to answer (and Joe, I don’t view you as an AMC but as an appraisal firm that has a bunch of appraiser’s that you split the fee with and you cover the office expenses. One point, your not our employer – your supposed to be our partner but looks like it got to your head – fact is YOU take part of OUR fee so YOU work for us Buster Douglas – matter of semantics though so oh well). When someone says AMC, I think of the big boys that take up to 60% of the fee. And for what? (rhetorical question again). I’ve seen all the reasons and answers and it’s just plain wrong. Just – plain – wrong. Don’t try and flower it up. You know it’s wrong. We know it’s wrong.

    One of the big 5 offers $200 for standard 1004′s in Seattle. $200? you say. Yes, $200. If you counter, you don’t get it. My partner in Georgia gets $350 from the same freaking AMC for a 1004. In GEORGIA for cow’s sake. How am I supposed to compete with somebody who’s willing to do a $400 (reasonable and customary) report for $200?

    But, as previously stated, nobody cares about us but us. Plain and simple. The sad reality. There is nothing that we can do about it. Except, to turn it down. But there is always somebody out there that’s willing to do it. No way around it. So turn it down and somebody hungry takes it and thus, sets the “customary and reasonable” bar for AMC’s. Sucks.

    It’s about about banks, big money and lobbying. We don’t lobby so we don’t get nothing. I’ve seen so many ppl say “hey, I’m starting a national appraiser group blah blah blah”. So where’s it at? We are a sad, beaten down bunch.

    So again, what we gonna do? Nothing. Nothing we can do except sit and watch – and hope. Hope that there is somebody that’s watching our backs cuz we’re not doing it. Joe’s not doing it. AMC’s aren’t doing it. The fate of our livelihood is in the hands of people with ulterior motives and pockets to line.

    But at the end of the day, I’m not going anywhere. So bring it.

  23. Kim says:

    “Joe” you should be ashamed of yourself as a fellow appraiser. Just curious….why did you now disclose the name of your AMC in your post? We would all love to know…..

  24. Joe says:

    I have been an appraiser for over 20 years. In 1990 the apprisal fee charged to the client (the broker at that time) was about $225.00. I worked for the owner of the shop and we split the fee 50/50. I received anywhere from 100 to 112.50 for the appraisal. As that fee slowly climbed, so did my split amount. The bottom line was that the owner worked hard to establish and maintain his clients. He paid for the office, the secretary, the copier, etc..etc..etc.. At that time, the “customery fee” to the client was 200-250. The “customary fee” to the split fee appraiser was 100-125. The problem now is when the term reasonable and customary fee was thrown out there, nobody clarified who that referred to. back in the day, if you wanted to earn more money or keep a full fee for yourself, you had to step up, open your own company and get your own clients. With the real estate boom of the late 90′s throught 2005, there was so much business and the brokers were such scum bags that they were handing out assignments not to who was cheapest, not to who was best, but who would play ball and hit numbers. Now that the brokers have been given a time out with ordering appraisals, the regulating bodies knew that the lenders now had sole control over the orders, and along with it, the pricing. the reasonable and customery fee terminology is directed at the lender or bank originating the assignment. They did not want them to manipulate the fees and drive them down to rock bottom and unfair prices. In other words, they still need to continue to pay 300-350 for a 1004, 350-400 for fha and on up from there for 2-4 etc.. HOWEVER, the same principles still apply to the appraiser. This doesnt mean there is no such thing as a split fee any longer, and that suddenly every appraiser is entitled to “full fee” because its reasonable and customary, and if the AMC’s want a cut, its up to them to try to charge the client more. NICE TRY. I am currently an owner at a national AMC. We operate just like and appraisal shop, we have the same overhead, we have the same requirements to return a quality product to the client, and we are not going to charge a client $600 for an appraisal. Thats ridiculous and any appraisal company doing it is just as big a crook as what everyone is making the AMC out to be. If you want a full fee, then go out and get your own clients. ITS NOT EASY. If you want to sit in your basement and wait for your fax machine to ring with orders, thatsw perfectly fine, but how dare you expect full fee. For those of you split fee appraisers out there now, especially the ones who work for only one shop, are you going to your bosses and and telling them you now want $350 and that they can go back to their client and see if they can get more to keep for themselves. Im sure your not, otherwise, pack your desk now. the bottom line is, historically, and for a fair split of the full fee, the appraiser has always been able to complete a solid report in a timely manner, and make a decent living doing it. These so called “discount” appraisals should contain nothing more or nothing less than any other appraisal. That opinion is coming from those appraisers who jumped on the bandwagon in the 90′s and early 2000′s, took their three classes and hung up their sign saying “appraiser for hire”. It is also these jokers who put us in this position to begin with because they were not “business owners” they were “contractors” who smelled money and were taken advantage of by the brokers. Now that their “client base” has been taken away from them, now they actually have to go out and solicit clients from a much smaller client pool who has an interest in getting a real appraisal. They now have to learn how to behave like a real business. If you are the lucky few appraisers who were able to do this and secure a client at full fee and still work out of your basement, good for you and keep up the good work. If you are a small shop owner, getting full fee, and splitting it with your fee guys, good for you, keep up the good work and thank you for keeping the appraisal profession the way it should be. As an AMC, (or large appraisal shop) we will continue to hire responsible appraisers at a fair split and provide good service to our clients. Lastly, do no confuse a true AMC with an “order platform”. Many very large lenders use order platforms to round robin their assignments. for this service, that company keeps part of the fee. That fee is in the $5 to$10 range per deal. Keep in mind that thay hold zero responsibility for the quality of the vendor or the report, and are not even appraisers. We are licensed appraisers responsible for reviewing and returning accurate and complete reports to the clients. we may go back to the apprasier and ask for clarifications or corrections just like any shop owner would of their contract appraiser prior to sending it back to the client. We hold E&O insurance, take CE classes, etc..etc… we are not organized crime, we are your emplyer, not your client. If thats not acceptable, then asI stated, go find your clients.

  25. Daniel says:

    Does pressure on the appraiser include fee tampering. If the AMC’s pressure the appraisers to work for the reduced fees or don’t work, feed your families, pay you bills etc.. Than this activity should be reported to to the regulators at the federal and state level. These crime syndicates need to be investigated and stopped. Can you say extortion? Report all AMC’s and let our political leaders explain why this new organized crime is allowed. I think the government should start regulating all private business. Here’s an idea. AMC Attorney Management Company $125 defence lawyer, AMC Accountant Management Company $125 Tax return, Here’s a good one HCMC Health Care Management Company, (Oh, I almost forgot that one in being worked on now.) What happened to free markets in the U”S”A? Maybe we should change the “S” to Socialist.

  26. Bob says:

    Is it OK to start requesting the customary and reasonable fees? I have an AMC already raising the on there own and others not so much.

  27. George says:

    …end of 2011…lol.

  28. George says:

    Ok, you tough guys…lol;
    I decided to try “customary and reasonable” with one of the low-end AMCs. They actually had the b**ls to call and ask for a “bid” on a $1 million plus property nearby. I stated $450, never heard another word. A week later, same situation…maybe 5 minutes from where I live. I dropped my “bid” to $400…end of conversation. I wonder where the winning bid got to.
    These AMCs are total bottom-dwellers…and they are driving this so-called profession. Shopping a job for the lowest fee might be reasonable for garbage collection or orange-picking but appraisers have reached the end of the road.
    Just paid my E & O; my license expires the end of this year. I’ll not be signing on again unless there’s a miracle!

  29. George says:

    Several AMCs, such as CoreLogic; have put up a new line of defense to protect them from questions about “customary and reasonable’. You can’t reach anyone who speaks english as a first language or even has a clue as to what you’re talking about.
    Ask for a supervisor…you get put on hold until you give up.
    There is some humor in this debacle.
    I did an appraisal the day before Thanksgiving. The morning after Thanksgiving I got a call (from India, I presume) asking where the report was. I replied that Thanksgiving is a national holiday. He still asked what my excuse was for a late report. I hung up.
    This is a profession?

  30. George says:

    Dave…
    It’s April Fool’s Day!
    Don’t smell the coffee, smell the B/S!

  31. Where is the “Customary and Reasonable fee???
    The Dodd Frank bill became law months ago. HVCC was to be allowed to sunset 90 days later.
    Now the Amc’s say they will be in compliance by April 2011??? What is going on?
    I deserve to be paid Customary and reasonable fees for the service I provide, and now I am entitled by law to be paid customary and reasonable fees. Where are they?
    I recieved an order from a major AMC and my fee had been lowered from the ridicously low fee they had been paying. I accepted the order with the condition that the fee be increased to a customary and reasonable fee. Needless to say they re-assigned the order. This happened at least 10 times
    I then get a blanket e-mail saying that they will be in full compliance by April 1 2011.
    Why do we have to wait?

  32. Jim Woodring says:

    The concept of customary and reasonable fees is complicated; appraisers can’t agree that it is valid or even possible.” ..there’s more at play in what is reasonable and customary appraisal fees. An independant appraiser can survive with customary fees and a few clients with modestly discounted fees if the lender’s or AMC’s appraisal guidelines are not excessive. But it seems the discount AMC’s want the most from the appraiser like a 4th sales comp. and 2 listing comps. and all MLS data sheets included in the appraisal; that’s excessive and warrants a higher fee not a discounted fee. However, if you are an IC working for an appraisal co. on a split fee commission basis or an employee of an appraisal firm working on a split commission it is almost impossible to survive financially. Many appraisers will have to choose to become completely independant to survive and small and large appraisal shops alike will become a thing of the past.
    (Sorry, I whould have edited the first draft.)

  33. Jim Woodring says:

    “The concept of customary and reasonable fees is complicated; appraisers can’t agree that it is valid or even possible.” ..there’s more at play in what is reasonable and customary appraisal fees. An independant appraiser can survive with customary fees and a few clients with modestly discounted fees if the lender’s appraisal guidelines are not excessive. But it seems the discount AMC’s want the most from the appraiser like a 4th sales comp. and 2 listing comps. and all MLS data sheets included in the appraisal; that’s excessive and warrants a highe fee not a discounted fee. However, if you and an IC working for an appraisal co. on a split fee commission basis or an employee if an appraisal firm working on a split commission it is almost impossible to survive financially. Many appraisers will have to choose to become completely independant to survive and small and large appraisal shops will become a thing of the past.

  34. George says:

    Well…10/19 draws near.
    I’ve heard from AMCs that this will cost the consumer more. I asked if this manager-type thought it might cut into the AMC “take”. It was as if I was speaking from Mars. The AMCs are in bed with banks and fear nothing.
    Congress ran home; many to try and hold their seats…many should hold their ankles!
    It will be a miracle if any justice comes from this legislation. I sense a legislative yawn.
    All you contributors getting your $450 a job can just play a round of golf. Other appraisers are about to drown in the water hazard.

  35. A number of appraisal management companies are placing terms of service agreements on their web sites which must be accepted to receive any work from them. Some of the “agreements” include language stating that acceptance of their fee constitutes “customary and reasonable” fees.

    DON’T SIGN THESE THINGS! They will use them as ammunition against us when the government decides how fees should be determined as regards the Dodd/Frank Financial Reform Legislation. If they can establish that fees typically paid by AMCs are “customary and reasonable” they will become the norm. They are taking money out of our pockets!

    Keep in mind that the benefits of the services AMCs provide accrue ONLY to the lender. They do nothing to enhance our circumstance. AMCs contend that they represent a source of appraisal work which is a strawman argument as lenders would still require appraisals in the absence of AMCs. The services AMCs provide should be paid for by the lender separate from the fee for the appraisal.

    Again, if you log onto an AMC site and are stopped by a “terms of service” or other similar contract, first: READ IT – ALL! Some are several pages long. They count on most of us to NOT read it. Don’t click “accept” without doing so. Know what you are agreeing to. Look for the “customary and reasonable” phrase. If you click agree, it will ultimately cost you and the rest of us money. AMCs are NOT your friend. You are NOT their “partner.” If you read through these “agreements” they are all slanted nearly 100% in favor of the AMC’s interests. Not yours.

  36. George says:

    I may be a fool for playing with Corelogic at absurd fees but they fill in the gaps…and I’m learning some broken english.
    Recently, I started working with a local appraiser doing divorce, estate, etc. What I do for him is all COD so I know what % I get and he knows I know. And the client knows the appraisal fee.
    Compare this to an AMC I must deal with which sends instructions, “don’t submit an invoice, (we) pay you automatically”. That is so comical; maybe it’s hilarious in India. The customer has no idea what the appraiser is being paid and the appraiser has no idea what the customer is being charged.
    The appraisers on here who get all sweaty about price-fixing should ask realtors why they don’t worry. Their take is in the thousands and it’s published on the listing.
    AMCs work in the dark; keeping secrets, encouraging nothing but TAT. I turn down 50% of their garbage but if I have an open day and the job is nearby…why not?
    Are you all (all 25 of you) really going on strike? And how many of you tell the truth?
    Guess I’m a bit jaded.
    (Hmmm…if I did 5 appraisals a week at $400 “per” that’d be over $100K). I’d be a golfing maniac! Is that what you all do with your spare time?

  37. Elaine says:

    The idea that appraisal fees on the HUD-1 represent what the borrower is willing to pay is ridiculous. First of all, the appraisal fee on the HUD-1 represents either only the appraiser’s cut of what the borrower is told the appraisal fee is or the entire AMC fee. And I’m pretty sure they never see what goes to the appraiser until they see the HUD-1. Secondly, the borrower does not negotiate the appraisal fee with the lender. They are told what the appraisal fee will be and they can either take it or leave and find another lender. Appraisal fees should be for the appraisal only, and if nothing else, based on pre-HVCC/AMC fees. AMC fees and other bank expenses are for what the lenders should have been doing prior to HVCC and the mortgage crisis, but that was just one more short cut they took to save money (read maximize profits).

  38. W.R.Buchanan says:

    We have been saddled with this term “Reasonable and Customary” .
    Now that we have this term, nobody knows what it means. Kind of like the lie that is told so many times it becomes the truth.

    Now, we have to define a term after the fact, that will govern how much we make for the rest of our lives. Does this not seem rediculous?

    Appraisers have not gotten a raise since I have been in the business. (10 years) all because our fee structure is based on a set fee for a specific job. What this does not take into consideration is the fact that the complexity of that job cannot always be adequately predetermined prior to acceptance, and the fee can generally not be altered after acceptance. As a result many times we end up having to spend many extra hours to complete a job that was NOT as it was represented . IE: we make considerably less per hour on that job that requires more of our expertise to deal with !

    I would submitt that if the customer is only willing to pay so much for an appraisal then ALL of that money should go to the appraiser. There is no reason other than greed that can justify a bank taking any money off an appraisal fee. They already make more than enough, with their absolute barage of fees. The only reason AMC’s were created was to skim more money off every transaction, and ultimately run us out of the business. Don’t bother to argue otherwise.

    We are supposed to be professional people and as such should be charging professional rates. We are licensed by the state, we have additional requirements to maintain that license and we have libility. The state says we are competant, that should be good enough for any bank. If they don’t like your work then they can go elsewhere. Incompetants would be purged from the business by attrition.

    Lawyers $300-600/hr, CPA’s $250/hr, Plumbers $95/hr, Auto Mechanics $99/hr. All are charging professional rates for professional services, and those rates are generally are NOT negotiable! Why are we taking less? WAY LESS!

    I have adopted a “billable hours” rate scheudule at $75 per hour. A normal tract house appraisal takes me about 5 hours to complete , thus $375. Obviously more complex appraisals will cost more, and I will bill extra for extra work!

    Obviously I have been met with total resistance from the lenders, but if more and more appraisers adopt a similar strategy, and as attrition removes more and more competition, the leverage will shift to our side of the fence.
    It is easy to come up with reasons why this strategy will not work, Instead why don’t you come up with reasons that it will work and implement them! One is positive, one is negative, you choose.

    I am urging everyone to adopt a similar rate structure and run it in the background. You can bid jobs based on this structure and when the leverage shifts to our side again you will already have this method of billing in place, and be able to profit from it instead of just hanging on like we are doing right now. If more and more appraisers adopt the “billable hours” payment model,,, IT will become reasonable and customary.

    Asking to be paid for your time is NOT un reasonable. And being told to include much more data in your product for no additional compensation is nothing more than theft enabled by a glut of incompetant’s in the workforce.

    This will change as more people are starved out of the business. Be ready!

    I also want to talk about joining an Advocacy Group in your area. I am a Member of the California Coalition of Appraisal Professionals. CCAP. We are an Advocacy Only group of appraisers, who are having a measurable affect on legislation after only being in existance since March of this year. Our letter writing and email campaign directed at the members of the House Finance Committee was instrumental in getting the “appraiser favorable” language put back into the bill, after it was removed. Henry Waxman was quoted as saying “it’s about time they organized.” Referring to appraisers.

    Come and look at our website and see what we are doing. Also don’t hesitate to sign up as we need the numbers to be more effective. With only 1000 members out of the 13,000 appraisers in CA We could pretty much dictate what legislation we wanted to protect appraisers from abuse. http://www.cacap.org Check us out.

    W.R.Buchanan

  39. ANTHONY S. APPRAISER says:

    By the way…I just tried to refi with citibank(mngt co are LSI, rels etc)….the loan officer told me I would be charged $425.00 for a 1 family appraisal… this tells you how much we as appraisers are being shaken down.

  40. ANTHONY S. APPRAISER says:

    NY; bkly, queens, kings, richmond, nassau, suffolk,

    LSI and Corelogic:
    1fam & condo/coop $275.00

    2-3 fam- 425.00

    4 fam- They try to push 425.00 -450.00

    Exterior- 250.00

    Landsafe:
    1 fam/condo- 285.00-295.00 depending on area bkly usually the higher

    1 fam/condo- over 500k- 340.00-375.00

    multi- 495.00-520.00
    over 500k – 570.00-595.00

    Exterior- 240.00

    FHA +50.00

    Here are actual fees accepted by these companies. Any appraiser currently accepting less is an idiot…any appraiser currently accepting and getting more is an idiot for keeping it to themselves and not sharing this info as part of the solution to low fee hardballing in this industry… These fee’s by all means are yet not enough to keep us in business, but we need to stick together as one!

    with some exceptions such as complex properties etc. , minimum customary and reasonable fees to stay in business, cover slow month and time off, pay insurance and expenses, without antisipation or any retirement savings should be as follows;

    1 fam 350.00

    2 fam 500.00

    3 fam 550.00

    4 fam 600.00

    FHA +75.00

    Exterior 275.00

    OK, to those of you whom are getting less

  41. ANTHONY S. APPRAISER says:

    OMG..George… you’re the reason we are were we are.. why would you except a measly $180.00 fee for all the liability and work needed to be performed. Im currently getting $275.00 from Corelogic, which is still not enough considering the liability and expenses involved in this business . Even accepting $275.00 for my fee’s are putting me into a negative. How would you do it. Maybe they were questioning your quality of work considering the quote given.?

  42. George says:

    More thrills from Corelogic (formally known as morally bankrupt E-Appraiseit).
    I got a call from them today asking if I could do a 1004 nearby “tomorrow”. Since I’m doing nothing; and had not heard from this gang in a year, I said “sure”.
    Then came the fee question. (It’s always some variation of “your usual fee”). For the life of me I couldn’t remember what their base fee was (I’m beyond negotiating; just trying to get another job).
    I said $185 including the 1004MC (now that’s a garbage fee) but I read people pretty well on the phone. There was just the slightest pause…then, “ok, I’ll clear it with the agent and send you the order”.
    The order has not arrived. I looked up the last 1004 I did for them (July, 09). I charged $180.
    Yeah, let’s all ask for a $5 increase!
    What a sewer this job has become.
    Hopefully, I’ll be out soon…customary and reasonable…my ass!

  43. Minimum Wager says:

    By the way…I guess I should disclose that I did paid myself countles billions in bonuses when everything calapsed around me, and I did it all on a $175 fee.

    (Note to self: I think I need a private jet)

  44. Minimum Wager says:

    Point #1

    Appraisers are treated like miminum wager earners because we have ALWAYS charged like minimum wager earners. But, look at a Realtor that makes thousands, even tens of thousands of dollars on even a single deal and they are brilliant people. Everyone listens to them. Of course, everyone knows what an appraisers job is except for the appraiser. (Just ask a homeowner!) This fact is borne out by the lobbying efforts of Realtors vs Appraisers.

    You (buyer), You (banker), You (homeowner) want to invest in a “long term, non-liquid asset” so you get a professional opinion of present value as defined, but you only want to pay the Happy Meal price tag….GOT WHAT YOU WANTED! Am I the only one who remembers the adage….”you get what you pay for”?

    Calling for a trade group to represent appraisers? What a joke! Where have the trade groups been? AI, NAIFA, NAMA, and others? Appraiser groups have never lined the pocket of one congressman, and it shows.

    Allow me to be the first to say it….appraisal fees should not be based on the end value, but they sure as heck should be based on degree of difficulty, and no appraisal fee should be less than $2,500….do the math…when you’re spending tens of thousands…it’s still a bargain! And, because you are still cheaper than that Realtor that does that oh so accurate BPO.

    Point #2

    Its laughable that FNMA and others find “irregular” appraisal practices and “inflated” values, et al, that have led to the current melt down. It is mind boggling that it is even suggested that the way to fix the mess we are in is through “tougher” appraisal standards.

    Let’s take another poll….

    Ok, every appraiser who has ever caused a mortgage to be a late pay, please raise your hand….

    Every appraiser who has ever caused a mortgage to end up a short sale, raise your other hand….

    Every appraiser who has ever caused a mortgage to end up in default, please stand….

    Ok, now that no one is standing and I can’t see any hands what was the real problem?
    The suits that offered the mortgage schemes in the first place! Schemes like 105% equity lines, 103% purchase schemes, hidden, gauging, and inflated points, backdoor commissions for brokers. I have an idea, let’s set up our underwriting to approve individuals with no proof of income. Let’s have our underwriters approve loans for those that filed bankrupcy two years past. Oh, but like Realtors they have lobbyist lining the pockets of our honorable congressman. Shouldn’t an underwriter be licensed? Wasn’t it the underwriter’s decision to approve the loan the catalyst that led to loan in the first place? Why does an underwriter review and judge my work when they have no idea what the heck an appraisal/market is in the first place?

    There are really, really, REALLY bad appraisers out there, but they didn’t exist in numbers until congress mandated licensing…ironic isn’t it!

    You can’t sue me and hurt me. You can’t take my license away and hurt me. Stop sending me work…you’ll kill me! And ladies and gentlemen, that’s how it used to be! Self regulation does work BECAUSE IT DID WORK!

    Point #3

    Everyone dies and yet we all can buy life insurance even though we will stop making our (life) mortgage payment. Insurance companies do alright.

    Just put me out of my misery and do away with the entire appraisal industry. There is plenty of data to formulate actuary tables for morgtage “lives”. Just charge buyers/owners/borrowers an insurance premium.

    Point #4

    Zillow.com and other sites tell you what you property is worth, but I can’t say you broken down arm pit, or your wall street castle is worth $1 unless I take a vial of my own blood, and offer my first born to the alter like Abraham.

    LONG LIVE ZILLOW!
    LONG LIVE THE BPO!
    LONG LIVE NY POLITIANS THAT RUINED MY LIFE!
    LONG LIVE THE APPRAISER…(well, I was going to say kill the appraiser, but you know….you need him around to punch)!

  45. marion says:

    To understand Customary and Reasonable Appraisal fees, we need to know the existing and historic Federal usage of the term and how HUD has treated Appraisal Fees.

    HUD’s Mortgagee Letter 97-22 stated that a lender could not charge a borrower a fee for an appraisal that was more than what the appraiser was to be paid. In the same letter it stated that Lenders using service providers could only charge the borrower the fees that were paid to the appraiser, and no more.

    HUD’s Mortgagee Letter 97-46 then states that “the Department will allow the mortgagor to pay a fee for the appraisal which may encompass fees for services performed by an appraisal management firm as well as fees for the appraisal itself. However, the total of these fees is limited to the customary and reasonable fee for an appraisal in the market area where the appraisal is performed.

    HUD’s Mortgagee Letter 09-28 dated September 18, 2009 stated the fee for the actual completion of an FHA Appraisal may not include a fee for the management of the appraisal process or any other activity other than the performance of the appraisal.

    So what we are left with is that all fees charged to borrowers for FHA appraisals since September 18, 2009 have been the Customary and Reasonable Fees for Appraisals, and all other lending appraisals established the Customary and Reasonable for these types of appraisals as these those appraisal fees for conventional lending, as stated in HUD’s Mortgagee Letter 97-46 were not superseded by HUD’s Mortgagee Letter 09-28, which only dealt with FHA Appraisals.

    The current issue stems from the 1997 Mortgagee Letter 97-46’s use of the term “which may encompass fees for services performed by an appraisal management firm as well as fees for the appraisal itself,” and the lack of enforcement and oversight on the part of the FHA to ensure that borrowers using FHA loans were not being charged appraisal management fees as part of the FHA loan package.

    Even the new RESPA (Real Estate Settlement and Procedures Act) allows only the name of the Appraisal Management Company be recorded on line 809 of the HUD 1 and the Good Faith Estimate, further cementing that the fees paid by the borrower are the Customary and Reasonable Appraisal fee, not the fee received by the Appraiser.

    The new Financial Reform Law states that, “i) CUSTOMARY AND REASONABLE FEE.—Lenders and their agents shall compensate fee appraisers at a rate that is customary and reasonable for appraisal services performed in the market area of the property being appraised.”

    For more than 10 years the fee for appraisal management services and any “other” service fees have been hidden from the public because these fees were incorporated as being Customary and Reasonable Appraisal fees. Today there are many groups running around trying to prove that Customary and Reasonable Appraisal Fees are fees that an Independent Appraiser will accept for the work. and are less than the fees that have been charged to the borrowers over the past year.

    But sadly for the Lending and AMC industries they cannot have it both ways. Either the fees that have been paid by borrowers have been the Customary and Reasonable Appraisal Fee without appraisal management or any other fees, in regards to FHA appraisals, or have been the Customary and Reasonable Fee that allowed the appraiser to accept less in order to accommodate fees to other entities in the transactions. Any survey or study presented now that states the Customary and Reasonable Appraisal Fee is less than what buyers have been paying will open a Pandora’s box of potential class action lawsuits from borrowers that were mandated to pay over and above customary and reasonable appraisal fees in contrast to HUD requirements that the fee was not more than customary and reasonable.

    This singular issue could be the prime focus of the new Consumer Finance Protection Bureau, considering the pure volume of residential lending appraisals that are being handled by Appraisal Management Companies.

  46. George says:

    The CoreLogic/E-Appraiseit connection is a tribute to the absolute “balls” of players in this industry.
    Yesterday, I received an e-mail…with CAPS and bold face ranting about the imprtance of “teamwork”. Who are they kidding! There is no team…there are no partners!
    And the entire page was about turn-time! There was not a single mention of quality…or the importance of such a silly thing.
    There was, however, a threat that if you don’t meet the TAT you will not be getting future orders.
    This is an absolute disgrace to the appraisal profession and the American home-buyer/refinancer.
    Legislation has been passed…and seems likely it will be ignored.
    The arrogance of these “middlemen” who do virtually nothing is beyond comprehension.

  47. Oregon CR Appraiser says:

    I’m praying that all the good stuff for appraisers doesn’t get stripped out of HR4173 before it goes to senate vote in the next week; the bill already passed the house. Here’s link to what I think is the current bill version and you should check out discussion of appraisal fees on page 2215: http://financialservices.house.gov/Key_Issues/Financial_Regulatory_Reform/Conference_report_final_2.pdf

    “CUSTOMARY AND REASONABLE FEE.—
    IN GENERAL.—Lenders and their agents
    shall compensate fee appraisers at a rate that is customary and reasonable for appraisal services performed in the market area of the property being appraised. Evidence for such fees may be established by objective third-party information, such as government agency fee schedules, academic studies, and independent private sector surveys. Fee studies shall
    exclude assignments ordered by known appraisal management companies.”

    Irregardless whether this bill passes or not, it’s time we start fighting back against anti-fair trade practices resulting from HVCC. Here where I live, we’re (finally) planning a local peer group meeting only for appraisers physically located within our 4-county MLS coverage area, to initially take a formal fee poll and to provide a moderated discussion forum for local appraisal issues. We are excluding out-of-area MLS subscribers in this meeting, because we don’t really think they should be considered peers to local appraisers (see USPAP guidance for determining peers in scope of work rule).

    It is always harder to organize larger groups, so my suggestion is to first try organizing a smaller group… even if it’s only 5-10 local appraisers. Initially we plan to hold monthly meetings in the free banquet room of a local buffet restaurant; for a 2-hour no host dinner meeting beginning at 6 pm on the second Wednesday of the month. I think these conditions might resolve cost and time issues that often prevent small groups from initially forming.

    In the old days, it seems like conventional appraisal fees often followed whenever FHA fees were increased and I think that method makes more sense than a current trend of FHA being $50 more than conventional… especially since work/requirements for conventional are now more similar to FHA. Some may say it’s price fixing if we openly discuss fees in a formal meeting, but since I didn’t see anyone calling anti-fair trade foul when HVCC took 90% of my hard earned clients… I’m not going to worry about it. Wording in HR4173 also requires formal fee polls, so I think we’re more than protected when we discuss “customary & reasonable fees” out in the open.

    Considering increase cost of doing business over recent years, and that we have mostly been prevented from charging for the new 1004MC form, and now have more reporting requirements and regulatory scrutiny than ever before, and that we probably haven’t had a fee increase in maybe 10 years (or more) and may not get another increase for another 10 years… I think a standard 1004 fee of $500 for our area is “reasonable and customary”. Considering many local property owners are charged $550 on the HUD 1 appraisal line, a $500 standard 1004 fee (excluding acreage, distant, unusual or extensive featured property) will also save many borrowers $50!

    And after we begin getting paid what we’re worth, we better ALL start doing the job we’re getting paid for! And for those too lazy to do their job appropriately… everyone needs to begin turning in that type of appraiser to your local state board. I truly believe that just 20 bad cheap/fast residential appraisers in a state, can ruin the profession for the rest. In protecting the public trust, I also believe it is each of our duty to either help others become better appraisers or help them out the door. Standardized fees and new rules requiring appraisal violations be reported should also force lazy appraisers out of business and promote quality appraisal work.

    Our group is also going to vote whether local appraisers should require minimum 3 business day turn time AFTER date of inspection. Around here, most of us are fed up with getting bullied by an AMC defined scope of work that dictates reports be uploaded within 24 or 48 hours after inspection; or as LSI requires… uploading on a weekend or holiday. This practice routinely applies inappropriate development pressure on the appraiser and it needs to stop!

    Another issue we will discuss is how to combat certain AMC’s like CoreLogic, who have poorly trained staff and poorly written Talon online software and procedure intended to inappropriately harass appraisers for QC corrections for things already included in the original report; but they won’t move it out of your cue until you respond to QC issues by making changes and re-uploading the report. It’s one thing if there really is an error, but to insistently pound the appraiser for comment on something that is already in the report… absolutely unbelievable.

    I don’t regularly read these posts, but if anyone wants to learn more about how our meeting results go… leave a post here or track me down and give me a call. Max @ OC.NCOPA

  48. George says:

    Let’s try some of my favorites…LOL.
    E-Appraiseit…now Corelogic as they try to stay out of jail; Lenders Service, IMortgage Services (stay by the phone), Nationwide Appraisal Services. These outfits actually seemed to perform a useful service at reasonable fees…but that was a long time ago…and before they went morally bankrupt while driving the dumb appraiser to real bankruptcy.

  49. David Cudworth says:

    I don’t know where David Biggers is getting his fee sources from but they are way off. I conduct VA appraisals, and the VA did a market analysis last year of what fee to charge for a single family home. The VA pay scale went from $350.00 to $425.00.

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