Why Do Some Appraisers Believe, Fees And Fees Alone, Determine Ethics?

[ucbruin]

Let's not get distracted by the "Moral" vs "Ethics" comparison chart. The only reason I include the chart is to show that, at least, one train of thought believes the 2 appear similar but are not the same thing.

So focus on ethics because ethics are the standards for any industry, profession, etc.






I find it fascinating how many appraisers post their opinions that fees, lower than their personal standard fees and/or fees that they want, guarantees unethical behavior by both the appraisers (who accept) and AMCs/lenders (who assign) the job.

Yet, should these same appraisers accept an assignment with a fee lower than their standard fees (for whatever reasons) these same appraisers would never even think about conducting themselves in an unethical manner....
I believe they would conduct themselves in an ethical manner....

In many instances folks have complained because of a $25 difference....
Do you really believe Billy will conduct himself in an unethical manner at a fee of $325 and in an ethical manner at a fee of $350+?????


http://keydifferences.com/difference-between-morals-and-ethics.html

 

[bnmappraisal]

In many instances folks have complained because of a $25 difference....
Do you really believe Billy will conduct himself in an unethical manner at a fee of $325 and in an ethical manner at a fee of $350+?????

You bring up a good point, UC.

I haven't changed my ethics regarding reports, but I have increased my fees. (as I've posted in the past, I did do a volume guarantee for below my standard fee). But even those reports, I still kept my ethics (and morals).

I can see this becoming an interesting thread ...

 

[Meandering]

I find your chart lacking in the very basis, of why you/us/we are going to attempt a discussion on this subject.

So let me be the first to point out what is lacking in your chart.

This aint church,
This is business.

It's all about the money, honey,
That's why you are "in business".

Else, you can pony up to a church and have your morals corrected.

.

 

[ucbruin]

I find your chart lacking in the very basis, of why you/us/we are going to attempt a discussion on this subject.

So let me be the first to point out what is lacking in your chart.

This aint church,
This is business.

It's all about the money, honey,
That's why you are "in business".

Else, you can pony up to a church and have your morals corrected.

.

I see you didn't read my post in its entirety.....

 

[Meandering]

I did, and I found it to be of no value.

Business ethics would include consideration of a volume discount, a less than "typically" motivated appraiser, blah, blah. which was not included in the snowflake chart you posted, after you said it wasn't really the point, but then posted it anyway.

Did you over do the gummy bears this afternoon?

.

 

[Terrel L. Shields]

We have a local University with a "School of Business Ethics" department named after a local Walmart (retired) executive where he teaches moral behavior among those who deal in business. Several years ago a local well-known Realtor asked a local well-known appraiser to appraise Mr. Executive's home and a lot next to it that he owned because he (the Realtor) didn't think he had the expertise to value it. So Mr. Appraiser did. Mr. Appraiser got heated call from Mr. Ethics complaining he undervalued it...who then refused to pay the bill. Mr. Appraiser "ate" the bill...period. A year later Mr. Ethics sold his house and lot for exactly the amount Mr. Appraiser valued it for. Did he get his check then? Nada. Did he apologize? Nada. Business and Ethics are mutually exclusive terms.

No one can do a job for less than the cost of production and maintain that business model long before going broke. That is a given. And the history of business is full of people attempting to recoup losses by unethical means. One sports figure went under after his manager bet huge on a horse race trying to recoup losses and defalcation of income. Others have made huge shorts in the market and lost...someone else's money.

But how many times have you seen people bidding work out? I know my pastor got 6 bids on is AC unit. One was double the average. One was well below the average and the remaining bids clustered around a mean. He took one of the 4. He asked the high bidder if he made a mistake and the guy launched into an attack upon the other bidders claiming they were shoddy craftsman etc. He found out later that, in fact, the high bidder was the shoddiest of the lot based upon a co-workers experience who not only overpaid but was having real issues with the unit.

So, over the years, I've tried to set my price at a reasonable amount. I am not rich. I will never be rich. But I refuse to play lowball with the bid systems like RIMS...and many appraisers I know feel the same way. But OTOH, I have done my share of pro bono work. I've done some for a children's hospital. I've done some for an elderly woman who had to move into assisted living after her MH burned (I valued the lot for DHS). Etc. I have no quarrel with someone wanting to do a favor, provide a low cost report, etc. But I know that they cannot consistently provide service at or near the cost of production and do so on a sustained basis without cutting corners...hence cutting that production cost. How so? Obviously. You don't vet the comps. You guess at things, fill in the blanks and when all else fails the one tactic that annoys me most is to provide a "Restricted Report" as a means to hide this lack of work, hoping no one ever demands the supporting workfile.

 

[Meandering]

Nothing better than appraising for a box of warm, home made cookies.

.

 

[TRESinc]

I find it fascinating how many appraisers post their opinions that fees, lower than their personal standard fees and/or fees that they want, guarantees unethical behavior by both the appraisers (who accept) and AMCs/lenders (who assign) the job.

Yet, should these same appraisers accept an assignment with a fee lower than their standard fees (for whatever reasons) these same appraisers would never even think about conducting themselves in an unethical manner....
I believe they would conduct themselves in an ethical manner....

In many instances folks have complained because of a $25 difference....
Do you really believe Billy will conduct himself in an unethical manner at a fee of $325 and in an ethical manner at a fee of $350+?????

of course not, but some appraisers seem to thrive on whining and complaining about fees and how they dictate not only the quality of the appraisal but the appraiser as well.

 

[EddieB]

In the same vein as Terrel's story. I had to call a very prominent and tenured Realtor for access into a home for an FHA assignment. We had a very long discussion into the ethics of selling and appraising real estate that she initiated.

At the end, I asked about any concerns her listing may have with FHA guidelines, including peeling paint on this 1930's bungalow. She proudly said that the home was picture perfect.

At inspection, I noted every window and most of wood siding had significant amount of peeling paint.

When she rec'd word of my report, she laid into me both barrels. Got to love ethics when they only apply to others

 

[ucbruin]

I did, and I found it to be of no value.

Business ethics would include consideration of a volume discount, a less than "typically" motivated appraiser, blah, blah. which was not included in the snowflake chart you posted, after you said it wasn't really the point, but then posted it anyway.

Did you over do the gummy bears this afternoon?

.

I'll assume that you did just focus on the "ethics" and not the "moral", good.

You include volume discounts as part of the industry ethics?
Some appraisers don't....