Confidential information, and how it applies to me.

[RCA]

Thank you all for your responses. I'll reach out to some administrative lawyers familiar with my state and see what i can figure out.

I'm looking forward to my participation on this forum. Hopefully I will be contributing soon, and not just asking for advice.

You seemed to imply that possibly you were both employees of the same corporation, although that was not clear with the "if". Certainly, there are appraisal corporations where the appraisals are open documents available to all other appraisers (dozens or hundreds) in the corporation. Such appraisal report archives might be for branch offices across the US or even the world. That would seem a safe way to share information.

FYI, large corporations can afford E&O Insurance with very high coverages in the $100M+ range - so that is a big advantage for them. They pull in big investors, such as insurance companies
and REITs. All Letters of Engagement are between the corporation and the clients; the E&O is for the corporation which I assume reports to the E&O insurance company those appraisers it employs.

Many appraisers and smaller appraisal companies have their own S-Corporation to reduce liability and taxes.

You do need to understand which legal entity is making contracts with your client: That is, is it you - or is it the corporation you work for? If you are working under a corporation, then the corporation name should be in the signature block.

Of course, get some legal advice. Your E&O insurance company may have in-house attorneys for some advice.

 

[Fernando]

That's what I'm trying to figure out. If we work on our own files but are under an "umbrella" corporation, or have some other formal agreement that would protect our clients data from unauthorized distribution, would we then be able to share information with each-other. I'm not going to ask every client if I can share their information with my co-worker. I am trying to find a legal and ethical way to share it without needing their express permission.

We are drafting up our agreement now, to hopefully avoid issues in the future.

I find it hard for you and your other to work in "umbrella" corporation together especially if you work with same client/lenders. I can see possible future problems.
When my friend appraiser mentioned about a lender he worked for, I applied to that lender. Has been one of my better clients. Never mentioned to my friend what I did.

Why can't you go on your own. It's easy. Work as a sole proprietor.

 

[RCA]

I find it hard for you and your other to work in "umbrella" corporation together especially if you work with same client/lenders. I can see possible future problems.
When my friend appraiser mentioned about a lender he worked for, I applied to that lender. Has been one of my better clients. Never mentioned to my friend what I did.

Why can't you go on your own. It's easy. Work as a sole proprietor.

It is unbelievable that so many appraisers do not understand the concept of a corporation and what it entails.

Rule:: If you are not smart enough to understand basic business law (take and pass a course in business law at some local university) --- then don't mess around with incorporating yourself - as you are likely to screw things up royal.

 

[Billy Bibbit]

It is unbelievable that so many appraisers do not understand the concept of a corporation and what it entails.

Rule:: If you are not smart enough to understand basic business law (take and pass a course in business law at some local university) --- then don't mess around with incorporating yourself - as you are likely to screw things up royal.

Can you elaborate here? What am I or Fernando missing about how corporations work?

 

[George Hatch]

Thank you all for your responses. I'll reach out to some administrative lawyers familiar with my state and see what i can figure out.

I'm looking forward to my participation on this forum. Hopefully I will be contributing soon, and not just asking for advice.

Don't even worry about asking for help. We aren't just talking to "you" in these responses, we're also talking to each other and to everyone who might ever read through this thread. Answering questions often does as much for the answerer and any onlookers as it does for the questioner.

For example, I can't explain my reasoning for something without organizing it in my own head and finding the words to say what I mean to say. Even if I'm just repeating an answer I've previously given the repetition helps me to refined the explanation and to reinforce my thinking on it. I am notorious for that, but others also do the same or similar.

 

[RCA]

Can you elaborate here? What am I or Fernando missing about how corporations work?

If you know how corporations work, then you wouldn't be asking. If multiple appraisers work for the same corporation and all contracts with clients are through the corporation then there should be no issue with sharing of information between officers or employees of the corporation with respect to appraisals done by said corporation (caveat: That is my understanding, I am not an attorney and corporation law is by state.). Now, with that as the default, certainly it could be possible for the corporation to make contracts with clients that specifically limit access to their appraisals to certain appraisers within the corporation. But one of the strengths of a business with multiple employees - is that there is typically backup in case of death or sickness or some other emergency that can take an employee offline - so corporations would be reluctant to assign or restrict work to only certain employees (especially only one), unless the client insisted - and then they would have to somehow provide for how to handle said employee going offline for reasons beyond their control.

That being said, you can see that a one-person business is at an extreme disadvantage when it comes to "important" work that is typically high paying. Such a person usually has only very poor backup at best, in case he gets sick or has an accident. Additionally, for appraisers, they can not afford $100M+ E&O insurance needed for big projects. So, then the question remains - can you make a higher net income working alone - or for a corporation that takes 50-60% of your pay? I've seen plenty of MAIs give up their business and go to work for a large appraisal corporation. And I have seen MAIs go bankrupt running their own business.

Certainly, the era of the early 2000s (before 2007), the heyday of the residential appraiser, is over.

 

[Fernando]

As a one person business, I understand my shortcomings like possibility I won't be around for stips. I try not to take too many orders before going on vacation and I take my laptop for emergency.
Fortunately, I have fellow appraisers I refer work to if I'm busy. I never had to do it but if I was not available, I could ask them for help.
Throughout the years I have no problems in giving out work that I can't do (come to think of it, they never gave me referral work but that's okay).
Certain appraisals I don't do like 5+ unit bldgs, mixed use, out of my area, attorney work, or divorces (too much negative energy).