…appraiser who claims to NOT SIGN any kind of appraiser employment agreement with an Indemnity Clause in it…
This essay is not positioned as a promotion of AMC’s, which after writing to the end I realized some may believe. I don’t like the AMC business model. But for the time being, we are stuck with AMC’s if one desires to work in the mortgage lending arena. However, some lenders are beginning to realize the AMC business model is proving unworkable and unwieldy, and are moving back to direct assignment placement, or use one of the available ‘portals’ to distribute and accept assignments and reports.
I decided to write this essay today, 9/12/2018, after having a ‘discussion’ with another appraiser who claims to NOT SIGN any kind of appraiser employment agreement with an Indemnity Clause in it. The appraiser gave me a copy of aUser Agreement an AMC wants their panel appraisers to sign. I will show you the actual Indemnity Clause from it below.
If that’s also your position as an appraisal business owner – to not sign an agreement with an Indemnity Clause – prepare to get less work, possibly retire, or move onto something else to do in life. Flipping burgers or being a ‘for hire’ driver come to mind.
The fact is, Indemnity Clauses, plain and simple, protect the ‘employer’ from the bad actions of the other party, whether that person is an employee or independent contractor, as are most appraisers. Almost all employment agreements for any kind of business have such a clause.
Before discussing this further, let me offer this perspective: most appraisers who are in business for themselves generally have very little actual prior business experience. Most often, appraisers have never started, owned or managed a business. Fewer have any kind of specialized education in business. Most appraisers I have met moved into the appraising profession after being an EMPLOYEE in some other kind of business, but not a manager. Employees take orders and provide services. Seldom do employees make decisions that affect the overall business operation.
The fact that appraisers with limited actual prior business experience are fearful of Indemnity Clauses is understood,.
Let me also say that I’m not a lawyer, and don’t act as one on TV. But over my working life, I have owned and operated 4 businesses and was the general manager of another one. This started with a paper route when in elementary and middle schools, and is now as the owner of two appraisal related businesses at age 71.5. I also READ these clauses, and can comprehend what they say.
Indemnity Clauses nowadays say that if YOU mess up, you will protect (Indemnify) the Employer (such as an AMC) from YOUR bad actions as an appraiser. That is fair and reasonable. It makes your behavior accountable. These are common and not to be feared.
The AMC’s Indemnity Clause is below. Because it is written in legalize, including a page of ‘definitions’ for various words in the entire Agreement, I have changed ‘User’ to “Appraiser.” I have also redacted the actual AMC name. The ‘Purchaser’ is the AMC’s lender client. This Clause references other parts of the Agreement, which I have not included. Just to make it easier to read, I have separated the sentences:
Again, this kind of Indemnity Clause is common. It is part of normal business relationships, everywhere. Although many AMC/Appraiser employment agreements don’t come with 19 pages written in legalize – which many appraisers have trouble digesting.
After reading, and comprehending, the Clause above, and you still won’t sign it, you might want to notify area appraisers that they can expect to see an uptick in potential business from the AMC. Then toss your clipboard onto the campfire, smash your laser measurer with a sledge hammer, and back out of appraisal work. Oh… and also notify the AMC about your position.