Thinning wallets and dwindling fees for work performed are nothing new for the appraisal community. Yet in their latest income-reducing move, AMCs have sparked an outcry by requiring appraisers to foot the bill for additional services. These charges are further cutting into appraisers’ fees, which already suffer from AMC management fee deductions.
Recently, FREA uncovered two hidden costs being introduced by AMCs – which of these have you experienced?
An increasing tendency among AMCs is the passing of technology fees on to appraisers. When an AMC orders a home valuation, the appraiser must submit the report through the AMC's authorized software. However, software providers, such as Mercury Network, charge a per-report transaction fee, which is billed to the vendor (i.e., appraiser) rather than the AMC. Essentially, in order to submit a completed work order as requested by an AMC, an appraiser must cough up anywhere from $5.00 to $15.00 per report filed, costs that add up quickly.
In effect, appraisers are taking a pay cut on top of their already-reduced fees. In some instances, when appraisers choose not to pay the fee up front, they must keep their credit card and other related personal information on file with the AMC, to be charged after each transaction is made. While some appraisers are fighting back by tacking on the technology fee to the agreed-upon fee for the appraisal, not all AMCs accept this practice.
Whereas performing background checks is a necessary measure taken by state regulators, some AMCs are now requesting these checks be done on new appraisers before adding them to their approved vendor list. Selection of the background check vendor is made by the AMC, who in turn places responsibility for paying the associated fee on the appraiser. Such fees can range from $10 to upwards of $100 per background check, and appraisers who accept the work orders before being made aware of these fees may feel obligated to pay them.
One such AMC has instituted a policy which appraisers a $99 annual subscription fee and issues civil and criminal background checks on all subscribers via a third party. This company claims no liability for the accuracy of these background checks and instead places it on the shoulders of appraisers. In order to remain active on their panel, appraisers must agree to these annual background checks and renewal costs.
There is growing concern over the potential risk of fraud and identity theft that can result from allowing frequent access to their personal information. Some appraisers are responding by refusing to pay the fees and keeping a copy of their background check handy for when AMCs demand a background check be performed.
Now It’s Your Turn
Have you been charged bogus fees by AMCs as of late? What actions are you taking to counteract these unfair costs? Join our discussion in the comments below.