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Will the BOND put YOU out of Business.

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Couch Potato

Elite Member
Joined
Mar 15, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
While I don't like the idea of the government adding on to my cost of doing business, the appraisers hit hardest by such a bonding requirement would be Skippy and his trainees. It would balance out the supply of appraisers through the elimination of Skippy faster than anything I can think of doing. The higher your volume of work, the harder it hits you in the wallet. Since it is based on the previous 12 months, good appraisers who have seen their volume drop dramatically in the past year will have very low cost bonds compared to Skippy.
 

RSW

Elite Member
Joined
Feb 18, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
While I don't like the idea of the government adding on to my cost of doing business, the appraisers hit hardest by such a bonding requirement would be Skippy and his trainees. It would balance out the supply of appraisers through the elimination of Skippy faster than anything I can think of doing. The higher your volume of work, the harder it hits you in the wallet. Since it is based on the previous 12 months, good appraisers who have seen their volume drop dramatically in the past year will have very low cost bonds compared to Skippy.

That would depend on where you are located and what type of properties you appraise.

I really don't know how it would effect me and my business. I don't think I would be able to afford to pay for a bond with everthing else that is taking away my income as an appraiser.
 

Ray Miller

Elite Member
Joined
Feb 20, 2002
Professional Status
Licensed Appraiser
State
Wisconsin
Nope, I will just past the cost on to the client and add another 2% for the additional paper work and time it takes to mess with it. :fiddle:

Do as goverment does increase fees to cover everything.:new_2gunsfiring_v1:

What oh what will the AMC do when thier pets have to up thier fees to cover the cost of bonds? Ask for another cost reduction?:clapping:

I think AMC should also be required to have a bond as well. So lets all contact our policy makers and request such.:icon_idea:
 
Joined
Jul 15, 2003
Professional Status
Certified Residential Appraiser
State
Connecticut
Based on the OREP figures, 15 x $350k = $63mm. I would have to figure 2 to 3 times that rate for my area in CT, so looks to be @ $13k to $18k per year.

Based on their numbers:

15 jobs x 12 months = 180 appraisals
180 x avg $350 = $64,000
Equals to 1% of gross

15 jobs x 12 months = 180 appraisals
180 x avg $300 = $54,000
Equals to little over 1% of gross

15 jobs x 12 months = 180 appraisals
180 x avg $175 = $31,000
Equals to little over 2% of gross

So you’re looking to add $35 to $70+ per report on top of regular fee. If the client is not willing to pay the additional fee, then most likely put you out of business.
 

Tudor

Member
Joined
Aug 15, 2006
Professional Status
Certified Residential Appraiser
State
Arizona
While I don't like the idea of the government adding on to my cost of doing business, the appraisers hit hardest by such a bonding requirement would be Skippy and his trainees. It would balance out the supply of appraisers through the elimination of Skippy faster than anything I can think of doing. The higher your volume of work, the harder it hits you in the wallet. Since it is based on the previous 12 months, good appraisers who have seen their volume drop dramatically in the past year will have very low cost bonds compared to Skippy.


I agree this could happen. But since they are "skippy" who says they will tell the truth as to how many appraisals they do. 2 reasons they won't tell, it will cost them more and they'd be afraid someone would get suspicious. How will anyone know, how many appraisals any given appraiser does in a year.

Not only that, how can they pass something that costs the appraiser more the higher the properties are valued. That goes against how we are supposed to charge for appraisals.
 

moh malekpour

Elite Member
Joined
May 25, 2002
Professional Status
Certified Residential Appraiser
State
California
I am not sure but I think the bond function is similar to E&O insurance with the different that the bond payment is immediate upont the prove of wrong doing and it is also already prepaid. I don't think honest appraisers should be worried about posting bonds for doing appraisal because if you don't do anything wrong, your bond remains intact.
If it was proved the Skippy was guilty, his or her bond money goes immediately. the skippy may try to hire an attorney to get the money back but that is going to be another cost and may or may not get it.
With E&O insurance, the Skippy has more protection because you and I who also pay for our E&O insurance pay for the attoreny of the insurance company who is going to protect the Skippy or pay for the settlement.
I think Insurance system is a socialistic, unfairs system in which law obeying members pay for violators. In addition, those who don't do too many appraisals pay the same fee that those who do unlimted appraisals.
Real estate and mortgage brokers carry bond and have no problem. Why should a broker who may not have any trasaction at all and a broker who does 100 transactions pay the same amount for E & O insurance?
 

Mike Kennedy

Elite Member
Joined
Sep 28, 2003
Professional Status
Certified Residential Appraiser
State
New York
I am not sure but I think the bond function is similar to E&O insurance with the different that the bond payment is immediate upont the prove of wrong doing and it is also already prepaid. I don't think honest appraisers should be worried about posting bonds for doing appraisal because if you don't do anything wrong, your bond remains intact.

Surety Bonds
While it’s not stated,it is most likely a surety bond that they want. A surety bond is a guarantee. What the bond guarantees varies depending on the language of the bond. It is a form of credit, not insurance.

The principal (you) pays a percentage of the bond amount called a bond premium. In return, the surety (often times an insurance company) extends "surety credit" to make the required guarantee (the bond). A claim can arise when the principal does not abide by the terms of the bond. In the event of a claim, the surety will investigate to ensure that it is valid. If the claim is valid, the surety will look to the principal (you) to pay the claim and any associated legal fees.

So the first key point is that the bond is not insurance, it is a form of credit where the principal (you) is responsible to pay any claims. Because it’s not insurance, it is likely that appraisers will continue to carry E&O in addition to the bond.
 

Wendy

Senior Member
Joined
Feb 23, 2004
Professional Status
Certified Residential Appraiser
State
Florida
......I think AMC should also be required to have a bond as well. So lets all contact our policy makers and request such.:icon_idea:

Good idea.
 

Elliott

Elite Member
Joined
Apr 23, 2002
Professional Status
Certified General Appraiser
State
Oregon
Is that the Dodd proposal? The same Sen. Dodd who got his teat
caught in a wringer because of his sweet heart deal on his personal
mortgages with CW. His legislation is probably dead for this
session, as is most legislation in a election year(s).
 
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