Usual & Customary? According to Who?
Try this method of “price fixing” in any other business and see what happens!
The “marketplace” usually sets what is considered “customary and reasonable”. Imagine asking attorneys to base their fees on what some government official (who knows nothing about their business) decides is “customary and reasonable”. It would NEVER EVER work, and should not be part of the appraisal (or any other) industry. It’s absolutely price-fixing which I always thought was illegal.
The HVCC started all this focus on the appraisal industry and everybody is so busy trying to remake the appraisal industry, the banking industry quietly slips away, paying their billions in fines (for the problems that were discovered) and are still counting their billions in profits quietly behind the board room.
The appraisal industry did not need the change, especially not to be singled out. The whole idea of a “customary and reasonable” discussion now just adds insult to injury. Who is qualified to determine how much money any profession gets paid?
Think about that. Who gets to decide how much we should pay for things like attorney fees, home inspections, bank loan fees, pest inspections, insurance rates, etc. etc.? How the whole idea of someone outside the appraisal industry telling an appraiser how much they can charge is crazy.
If I work for twenty years and become a specialist in one unique market, do I have to work for the fee some bureaucrat sets? Does experience and quality have no bearing on how much we get paid anymore? This is not some computer software, appraisal takes skill. It is an “art” and should be compensated as such.
Try getting an appraisal license and then see what you think is a fair fee. Unless you know the process, you are not qualified to judge anything and have no clue what is a fair fee.
Appraisals are the last defense against mortgage fraud and overpricing in the real estate industry. Consumers deserve quality when participating in what is for many, the largest financial transaction of their lives. The only reason this discussion is going on is because banks want to profit from the appraisal process. This is all about taking money away from the appraiser and giving it to an appraisal management company; who needs little training, who accepts little risk, and adds no value at all to the consumer. This is about money, pure and simple. A professional appraiser protects the public, and quality (as defined by the appraisal industry, not an AMC who only cares about fast and cheap), should be at the top of the importance list. This massive smoke screen over “turn times” and lower appraisal fees is doing zero to help the home buying public. Appraisal Management Companies (who do not have to disclose what they get paid, although everyone else in the home buying process is required too) came into dominance overnight thanks to Andrew Cuomo. I vote they go out of existence just as fast as they came in. Take them out of the appraisal industry and let appraisers get back to protecting consumers instead of playing games with knit picking appraisal management companies trying to find anything to make them look like they are adding some benefit to the process; they are not.
Give the appraisal industry back to appraisers, before it’s too late! Customary and reasonable cannot be achieved and is downright un-American! It’s also a waste of time. Let the appraisal industry work on doing better appraisals, and let’s look at getting better information from Realtors®. Then we may see the improvement we all want and need. “Reform” needs to look at the real estate and banking industries and get off the appraisal bandwagon.