bvappraisal
Freshman Member
- Joined
- Jan 10, 2008
- Professional Status
- General Public
- State
- California
Can appraisers pay someone a referral fee for sending them an appraisal? Is there any criteria to do this or not to do this?
The payment of undisclosed fees, commissions, or things of value in connection with the procurement of an assginment is unethical.
Comment: Disclosure of fees, commissions, or things of value connected to the procurements of an assignment must appear in hte 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, show be the primary basis for awarding an assignment.
Question: It has come to my attention tyhat a local appraiser is paying a home inspection firm a $25.00 referral fee for each appraisal assignment the home inspector refers to the appraiser. Is it unethical to accept such an assignment if the appraiser has paid a fee for the assignment?
Answer: No, but accepting a fee requires specific disclosures. The Management section of the ETHICS RULE states:
The payment of undisclosed fees, commissions, or things of value in connection with the procurement of an assginment is unethical.
The Comment to the Management section goes on to say:
Disclosure of fees, commissions, or things of value connected to the procurements of an assignment must appear in hte certification and in any transmittal letter in which conclusions are stated.
Therefore, payment of the referral fee to the home inspection company is acceptable as long as this relationship is disclosed in the appraisal certification and any transmittal letter where conclusions are stated.