Kernersville, North Carolina (PressExposure) May 03, 2012 -- It's been 3 years since the Home Valuation Code of Conduct, known as HVCC, went into effect and was since replaced by the Frank Dodd act. The legislation states that Appraisal Management Companies (AMCs) must pay "customary and reasonable fees" to their appraisers. Who decides what is "customary and reasonable"? The lender, the AMC, or the appraiser? When it comes to fees, all three of these parties should be on the same page.
The "bad apple" AMC's out there earned a dismal reputation early on for undercutting and driving down appraiser fees, while keeping a larger portion for themselves.
Enter a NEW BREED of AMC. The appraiser "friendly" AMC. A new category of AMC's began arising out of the ashes of the old system. These AMC's were run quite often by appraisers themselves. These new AMC's came out with the idea that Appraisers were the industries best friend, and should be treated with both respect and paid reasonable fees. In turn, these new AMC's began to have both satisfied appraisers and clients. The end result of treating clients and vendors with equal amounts of respect.
The topic is still a sore point with many appraisers - especially after the collapse of some larger national AMC's who left their appraisers holding the bag.
Based on workingRE.com's "One Year On HVCC Survey"* completed by appraisers nationally from 2010 -2011, 56% responded "hardly ever/never" to the statement "You are receiving what you consider to be "customary and reasonable fees" from AMCs for appraisal assignments". Only 25% responded with "sometimes" and 6.8% with "Always/Often". The percentage of appraisers stating they are not being compensated appropriately for their work, since HVCC, is still a reflection of an industry that has not quite come thru the fire yet.
Example Survey Question to Appraisers:
*You are receiving what you consider to be "customary and reasonable fees" (CFRs) from AMCs for appraisal assignments:
Hardly ever/never: 56.2%
Don't accept AMC work: 9.5%
Unsure/don't know: 1.7%
As a lender, do you know if your AMC is paying their appraisers a true "customary and reasonable" fee? If you aren't using an AMC currently, be sure to include this question during your AMC interview, so your lending institution is partnered with an appraisal management company who has a solid reputation with their appraisers. Appraisers deserve to be compensated fairly and timely for their work. And a happy appraiser, often times means a good report, and a happy lender.
Find an AMC, who prides themselves with being fair to both our client partners and vendor partners. A quality product starts with a quality agreement with both the client and vendor. There should be no fuzziness to the interpretation of "customary and reasonable fees" with an Appraisal Management Company. Appraisers deserve to be paid a fair wage for their professional work.
If your AMC is abiding by these solid business principles, give them a pat on the back....they are out there bucking the trend - AND protecting YOUR interests!