Ask Henry
Customary & Reasonable Fees in Certification
Dear H2:
This is a portion of a six page contract that I have to sign and send back in order to receive additional work with NREIS, address below. They are well known to pay low fees, and to take 90 or more days to pay the appraiser. Here's what the contract states about fees:
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National Real Estate Information Services, a Pennsylvania limited partnership, having an address at 100 Beecham Drive, Pittsburgh, PA 15205 (the “Company”). The following certification should appear in the additional comments section of page 3 of the appraisal form:
“I have agreed to the terms of payment from Company and consider the fee to be customary and reasonable for my specific market for this specific property and report type.” (Emphasis added.)
"No employee, director, officer, or agent of the lender, or any other third party acting as a joint venture partner, independent contractor, appraisal management company, or partner on behalf of the lender has influenced or attempted to influence the development, reporting, result, or review of this assignment through coercion, extortion, collusion, compensation, instruction, inducement, intimidation, bribery or in any other manner.”
“I have not been contacted by anyone other than the intended user (lender/client as identified on the first page of the report), borrower, or designated contact to make an appointment to enter the property.”
“I have agreed to immediately report any unauthorized contacts either personally by phone or electronically to Company."
“I understand that according to the current regulations, that it is mandatory for the client or intended user of this report to inform the proper regulatory agency if this report does not comply with USPAP Standards.”
The above certification is to be included within the actual appraisal on every report you complete for COMPANY.
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I hope that we can fight this current interpretation of “customary and reasonable” fees, as several other AMCs are using the same rationale. If we sign such a contract, we basically agree with their concept of what we should be paid! How is that "independent fee appraising"?
Bob Godwin
Appraisal Services of the Gulf Coast
Pensacola, FL
rcgodwin2@appraise.gccoxmail.com
Dear Bob,
I have some doubts in my mind as to whether this is an appropriate thing to be part of an appraisal report, especially where they want you to put it on page three. However, I am not aware of any regulation that prevents you from doing so as long as what it say is correct. I think you have to make a business decision as to how badly you want their work.