Solidifi Agreement provides little or no protection for the appraiser…
Many appraisers have seen the Solidifi agreement that appraisers must agree to if they want to receive appraisal assignment from them. This 18-19 page agreement written by a lawyer which was paid by Solidifi provides lots of protection and power for Solidifi and little or no protection for the appraiser. Many of you might be on the fence, should I agree to this or should I not and know that I will lose some business. If Solidifi is your major provider of appraisal assignment they have just put you between a rock and hard place, sign the agreement or refuse to sign and go out of business. Not an easy decision that is for sure, but you have no one to blame except yourself. I know that it is very comfortable to have one or two major customer that supply a large amount of your assignment, you get to know them and they get to know you which make your life easier. You only need to remember back to Business 101 to know the pitfalls to having only 1 or 2 suppliers of most of your work. You are at their mercy, if they got out of business, you will take a big hit and may go out business along with them. What choice do you have if they notify you that they will be reducing the fee that they pay for appraisals by 50%? Hopefully you have a diversified clientele and could survive losing one of more of them.
Regardless if you are going to sign this agreement or not, I suggest that you contact an attorney, maybe your E & O Insurance attorney prior to making any decision. I would guess that the attorney will tell you that this is a business decision and you will have to decide that for yourself, however I would hope that he would provide you with some of the pitfalls of signing this type of agreement. It is my opinion that this agreement has lots of conditions that are not in the best interest of the appraiser and it would take too long to cover all of them. Some are how fees are determined for assignments, non-payment if they cancel the order, indemnity agreement, agreement governed by New York laws, continued liability of appraiser after terminating the agreement and the list goes on.
This type of agreements are not new and some other AMCs also require them however it is something new that the appraisal industry (AMC) has come up with in the last few years. Several years ago when you received an assignment from a lender or AMC there was no agreement that was required and the assignment was usually only one page.
Agreements between two business entities should be beneficial to both parties and promote a good business environment that encourages a harmonious working relationship which allow all parties to succeed. I have a hard time finding that in the Solidifi agreement or most other agreements that AMCs require. Business owners need to make sure that they do not put themselves into a situation where they have no choice but accept the demands of one or more of their clients to survive.
Appraisers can work with AMCs provided it is on a level playing field, unfortunately that is not the case as I see it at the present time.