Kickbacks?

[nickp]

Can an appraisal company offer incentives in the form of: Gifts, vacations, etc based on appraisal received. If not, could you please let me know where to find regulation addressing same. Thanks

 

[Diego Lopez]

Yes, so long as every report you send out explains that you are offering a kickback to the whomever, if not you are in violation of RESPA and USPAP.

 

[Mike Boyd]

Can an appraisal company offer incentives in the form of: Gifts, vacations, etc based on appraisal received. If not, could you please let me know where to find regulation addressing same. Thanks

Your fees must be higher than mine to have room for give-aways. I don't think there are any laws against it.

 

[Michael Tipton]

Can an appraisal company offer incentives in the form of: Gifts, vacations, etc based on appraisal received. If not, could you please let me know where to find regulation addressing same. Thanks

Management (ETHICS RULE)

The payment of undisclosed fees, commissions, or things of value in connection with the procurement of an assignment is unethical.

Comment: Disclosure of fees, commissions, or things of value connected to the procurement of an assignment must appear in the certification and in any transmittal letter in which conclusions are stated. In groups or organizations engaged in appraisal practice, intra-company payments to employees for business development are not considered unethical. Competency, rather than financial incentives, should be the primary basis for awarding an assignment.

http://commerce.appraisalfoundation.org/html/2006 USPAP/toc.htm

USPAP is incorporated in the Florida Statute that regulates the Real Estate Appraisal industry.

 

[Restrain]

Texas regs specifically preclude ANY kickbacks, etc. Regs vary from state to state. However, enforcement is very difficult due to proving such kickbacks exist.

 

[Mike Kennedy]

http://appraisersforum.com/showthread.php?t=128956

 

[Mike Garrett RAA]

From a USPAP perspective...

The problem is "un-disclosed fees". So long as it is disclosed in any cover letter and in the appraisal report it is permitted. 2006 USPAP goes on to say...

Page 8 Line 264..."Competency, rather than financial incentives, should be the primary basis for awarding an assignment".

Barring any state law or statute to the contrary, an appraiser might choose to offer a financial incentive to obtain work. This would be a business decision on the part of the appraiser. Is this really any different than working for an appraisal management company (AMC)? The appraiser is giving up part of the fee in order to obtain an assignment.

Personally, I would be willing to offer a "discount" for work from a high volume client...especially in light of today's declining number of assignments.

Again, disclosure is the key. Now, what is the threshold where disclosing kicks in? Does one need to report, as an example, taking a potential client and spouse to dinner? Should you report buying a bottle of wine as a Christmas gift? You be the judge.

 

[Ray Miller]

What about a contest the processor, lender, AMC that sends the largest amount of orders in the next 90 days will receive, a 9ft HD TV System with all the bells and toots. A $3000 Value or a Gift Certificate for a Horse Drawn Bobsleigh Ride with Prine Rib of Elk Dinner at M & M Ranch & Outfitters for a group of 20 people. www.mmranchfun.com

Or a weeks stay at the Shady Rest Motel in Forsythe, Mo. with the Quick Turn Time Twin sisters.

Would a contest need to be disclosed?

 

[Lost Cause]

Would a contest need to be disclosed?

Yes.
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[Ariba]

How about the a la mode $1,000 monthly sweepstakes giveaway for lenders to register? Is that marketing? Where is the line between marketing and kick back?

http://www.alamode.com/Support/Marke...stwinners.aspx