When Customary Fees Become Unreasonable

[DiverMike]

Fellow appraisers, I've been working on a proposal for recommended national MINIMUM appraisal fees where GSEs are involved. The first draft can be read at the following link, OR at appraisersguild.org

please visit http://mfford.com/html/c___r_fees.htm

Apologies for using my personal site but logistical and time constraints made it necessary.

It is a draft proposal for minimum national appraiser fees. I appreciate some believe no one other than themselves should set fees, and I concur. Except, in the real world of today where someone (lenders and AMCs) are ALREADY SETTING your fees. If not directly, then through ruinous less than customary OR reasonable fee competition. If a consensus can be developed the AGA will be proposing / lobbying members of Congress and or regulatory agency leaders for adoption of this schedule as a default where disputes arise; OR where individual states have not yet established clear cut, non ambiguous definitive methods for determining "customary & reasonable appraiser fees."

Im interested in your meaningful, constructive feedback as well as any comment & discussion here.

For those that insist ONLY regional fees are practical, this same system works for the lowest to highest regions of America. Subtract 13% for low cost areas; add up to 9%+- for highest cost areas.

Operating premises were:

1. AMCs are here to stay. Liked or hated, they are part of the chain now.

2. LENDERS want AMCs to offer one size fits all pricing. This MAY come close to doing so barring complex assignments. Even there, an inferred hourly equivalent is suggested.

3. If WE don't set "reasonable" minimums for ourselves, then others will do it for us (or to us). Presently the total fees offered to AMCs by lenders are below the MINIMUM recommended national fee.

4. Framework allows for and includes inducements for trainees or less than certified appraisers-who have been largely excluded or ignored by AMCs in recent years.

In addition to posting here, PLEASE also email comments to JanBellas@appraisersguild.org or to myself at mike@mfford.com . Feel free to call if any questions (714) 366 9404.

We are going to start reaching out to state coalitions and other appraiser peers groups. We hope to incorporate helpful comments or views in that effort. In the meantime our parent union is already being contacted to see how we can best proceed.

Thank you for taking the time to read and respond. Mike Ford, AGA; OPEIU/AFL-CIO

 

[Meandering]

123456
gotto run

 

[glenn walker]

The minimum fee would be the fee the lenders and GSEs and AMCs would adopt? If I was running a large AMC I would love for some agency to establish a minimum fee because that is exactly what the AMC will offer it's roster. Karl Marx said in the Communist Manifesto ( The minimum wage-fee ) is the amount required to pay the labor just enough to procreate and survive )

Thank You but No thanks I would rather keep negotiating with the lenders and AMCs because I believe I can do better than the minimum and I really don't believe in C & R because the C & R in my area is about $325.00 and the larger AMCs owned by the banks and title companies are paying as low as $250.00. Also every-time the government has got involved in our business it just gets worse.

 

[hastalavista]

Im interested in your meaningful, constructive feedback as well as any comment & discussion here.

Mike:

Then I hope you'll take this as constructive:

There is a contingent of appraisers who do not want "national" fees set. I'm one of them.
Further, while I appreciate you are trying to rate pay with time-in service or experience (like that GS system), I'm against that as well. Time in-service or license level or designation is not a reliable indicator of quality or competence. I can perhaps see such a grading system working within an employment setting but I don't see it as fair or equitable in the fee world.

The point of my post isn't to argue with your proposal (that would not be constructive). The post is to point out, publicly, that not all appraisers agree with the idea of a national fee and not all appraisers agree with the idea that pay scale be dependent with time-in-service.

But, I appreciate the goal (improve earnings for appraisers). I just don't agree with your road map you propose to get there.

Good luck!

 

[Terrel L. Shields]

I prefer the "Don't ask, Don't tell" policy of pricing. The bank should not be able to ask you to bid on a project nor to set fees. They should engage you once they determine the appraiser is qualified. Then you tell them what the fee is and the turn time. That is the way it was in 1992. Think of me as just "Retro"...

 

[glenn walker]

The appraiser is qualified if he/she has a State License : ) And don't forget that !

 

[Michigan CG]

I have a strong negative opinion about manipulating the basic market forces of supply and demand. While currently AMCs have the upper hand the quality of their reports is being scrutinized. I would much rather be paid based on my abilities rather than a "minimum" wage. The AMC ways of doing business will have to change significantly in the next few years because of market demand of their services.

Set fees do nothing but pay people for minimal standards and there is no reward for others to excel and write more thorough and supported reports.

The market should decide the fees.

 

[Howard Klahr]

I prefer the "Don't ask, Don't tell" policy of pricing. The bank should not be able to ask you to bid on a project nor to set fees. They should engage you once they determine the appraiser is qualified. Then you tell them what the fee is and the turn time. That is the way it was in 1992.

This is entirely not true.

 

[J Grant]

I will review the proposal this weekend...overall I am in favor, as it is minimum national fees for lender res work only...apparisers are free to set their own fees for all the other kinds of work out there. The only res lending appraisers being paid well on a consistent basis for the majority of assignments is the VA panel, because they do have set minimum fees.

I presume the idea is for minimum fees, and I presume they are not meant to apply to complex res work, commercial work or, non lender work .

 

[Terrel L. Shields]

This is entirely not true.

Was where I lived... They might tell me that they needed it ASAP, but there was no haggling over price.