Residential C&R Fees Study in Virginia
Virginia Study on Customary & Reasonable Fees for Residential Appraisals
BLACKSBURG, Va., Oct. 7, 2014 – Virginia Tech researchers and students conducted a survey of Virginia residential real estate appraisers to analyze the patterns of fees earned in 2013. Prior to the release of this report, no data existed that defined “customary and reasonable” residential real estate appraisal fees in Virginia.
This report is the third report of its type to be conducted in the United States, and the first in Virginia.
The research was conducted in response to recent amendments to the Truth in Lending Act modified by the Wall Street Reform and Consumer Protection Act, also known as Dodd-Frank. This legislation requires lenders to pay appraisers a “customary and reasonable fee” for residential real estate appraisal services in their geographic market.
Mark White, president of the Virginia Coalition of Appraisal Professionals – a non-profit appraiser advocacy organization – and a certified general appraiser in Roanoke, Virginia, said,
“VaCAP is pleased to have had the opportunity to lend its support to the Virginia Center for Housing Research and the Virginia Tech Program in Real Estate’s survey. This survey provides an undisputable benchmark by which stakeholders can measure compliance with Dodd-Frank’s customary and reasonable fee mandate and aid in promoting and maintaining a high level of public trust in the appraisal profession.”
Researchers and students from the Virginia Center for Housing Research and the Virginia Tech Program in Real Estate conducted the research over the spring and summer of 2014. Nearly three hundred appraisers from across the commonwealth responded to the survey, describing the levels of fees they earned for various types of residential appraisal services.
Their responses included information on fees earned when working for appraisal management companies and fees received when working on non-AMC appraisals. Where Dodd-Frank explicitly prohibits data from AMC appraisals to factor into customary and reasonable fee estimates, gathering information on all types of fees earned was crucial for the study to understand the appraisal fee
structures in Virginia.
The Dodd-Frank legislation defines a customary and reasonable fee as one that would be received for, “comparable appraisal services performed in the geographic market of the property being appraised.”
The study found that the average non-AMC fee for a single-family residential appraisal in Virginia is $401.
This is the best estimate of a customary and reasonable fee for this type of appraisal service. Another important finding of the research is that the fees reported by appraisers for AMC appraisals are much lower, at $328 for a single-family residence.
Further, there was no evidence of a systematic influence on fees by geography.
The study also found that 60 percent of appraisers are 51 to 65 years of age and earned between $50,000 and $150,000 from appraisals conducted in 2013. These results indicate a profession that offers very good opportunities for young professionals entering the industry.
The research team was led by Andrew McCoy, director of the Virginia Center for Housing Research at Virginia Tech and Kevin Boyle, director of the Virginia Tech Program in Real Estate.
Virginia Study on Customary & Reasonable Fees for Residential Appraisals – VT