A recent email circulated among appraisers from a large national appraisal management company stating recent market research of appraisal fees had been conducted and our fees will be changing. The email indicated that some fees increased and some decreased. The email also gave instructions on placing your fee into their system and they will review and approve or deny your fee.
VaCAP has gotten reports from members that fees have dropped by as much as $120 in some areas and our members are beyond upset. We must agree, a reduction in fee of $120 overnight is concerning.
From the information provided to us, it appears this amc is averaging fees. Here is a snippet from the amcs’ website:
VaCAP has a few questions that come to mind:
Why is this amc averaging fees? Nowhere in Virginia Statute or Federal Legislation does it state averaging fees is an acceptable method to determine Reasonable and Customary Fees.
Who did the market research? Virginia Statutes are very specific on how Reasonable and Customary Fees are determined. In the event of a fee study, it must not include fees paid by appraisal management companies. Does the market research conducted comply with Virginia Statutes? Federal Statutes?
Did the fee being charged to the borrower change as well? Public Trust and Protection are key components to licensing of appraisers and amcs, not just in Virginia but in every state.
Are there any anti-trust concerns with what this amc has done? A current Federal Trade Commission case against the Louisiana Real Estate Appraisal Board accuses Louisiana of conspiring to set fees for appraisal services. Are the actions of this amc not an anti-trust concern as well?
Have appraiser’s expenses decreased to justify a reduction in fee? Has any appraiser seen a reduction in operating costs? Software expenses? MLS fees? What about portal fees? Prior to amcs, portal fees were very low and infrequent. Some portal fees are in excess of $25 per report now. What about the sales tax now being collected?
Have turn times become shorter? Normal turn times have traditionally been 5-7 business days. Amcs are now requiring appraisals in 3-4 days and they are counting weekends. Weekend hours of Saturday and Sunday are not business days. If anything, this would require an increase in fee, not a decrease.
VaCAP is not telling anyone who to work with and what fee to charge. We are asking each and every one of you to think about your business. What are your business goals? What is the profit margin you expect? Do your clients and amcs (amcs are not clients) fit well into your business goals and plan? Is your business diverse enough to terminate a relationship with clients and amcs that don’t meet your expectations? Remember, without appraisers, amcs cannot exist.
Know your worth and charge accordingly.