BROOKLYN, N.Y. — In this market of choices, when it comes to using an appraisal management company one of the first questions a lender wants to know is “What are your fees?”. While fees for any service are very important, in appraisal management it’s important for lenders not to undercut the management company, because their appraisal orders will be assigned to the appraisers with the lowest fee just to make a profit. Appraisers in each market truly determine what the fees should be, so it’s these fees that should determine the appraisal management company‘s fee schedule. Whether an appraisal management company is working for a bank, credit union, mortgage broker or REO management firm, fees should be discussed upfront, so the client knows what they are paying for.
Paying “customary and reasonable fees” to appraisers is required per Dodd-Frank, but it’s so vaguely written that many appraisal management companies feel that if the appraiser accepts the order at very low fee “it must be a reasonable fee”. Appraisers deserve to be treated with respect and paid fairly for their professional service. Having an AMC search out for the “cheapest” appraiser, is a sure fire way to get a “less than stellar” appraisal report. Every profession has the “Low Price Leader”, but are they always the one you want to do business with? Is the $5 haircut really as good as the $30 haircut? Are you willing to risk slowing the loan process down or not closing at all, because your AMC sought out an appraiser who would complete your appraisal assignment for the lowest fee? Reducing the risk of loan default, caused by an inaccurate valuation, can actually be prevented upfront by using the best appraiser for the assignment.
A number of states have enacted legislation regarding specific appraisal fee disclosure requirements. There is currently no federal guideline on appraisal fee disclosure, so state regulations vary in their requirements. Some states merely require full disclosure of the fee split between the appraiser and the AMC and others require the appraiser to state their appraisal fee to the AMC to be on their appraisal report. As an AMC owned and operated by an appraiser, Nadlan Valuation welcomes full fee disclosure. Nadlan Valuation has nothing to hide from their clients or vendors. As an AMC, Nadlan Valuation doesn’t claim to be the “low price leader”, but they are proud to be a great value to their clients. Nadlan Valuation keeps their management fees fair and pay their appraisers well, simply by keeping marketing and operation costs down and pass those savings on to their clients.
Nadlan Valuation is the appraisal management company for Main Street America. We work with small to medium size hometown banks, credit unions and mortgage companies to deliver the most accurate reports in a timely manner. Working with Nadlan, you get the same professionalism as a larger AMC, but the personalized service you run your own organization with.
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