Appraisers take issue with management companies

Some residential real estate appraisers say third-party management companies are taking a big bite out of their fees, and they want the Louisiana Real Estate Appraisers Board to do something about it. Federal legislation meant to separate the appraisal process from lenders and borrowers to avoid conflicts of interest has spawned a number of appraisal management companies, or AMCs. The law says the companies should pay appraisers—at a minimum—a rate that is “customary and reasonable” in their market, or face penalties of $10,000 a day. But appraisers say the rule isn’t being enforced. They say certain AMCs might charge the consumer $400 or more for an appraisal, which would be pretty typical in the Baton Rouge area, while paying the appraiser $275 or less. Appraiser Joseph Mier is encouraging his colleagues to fill out surveys stating what they’ve been getting from AMCs, compared to their customary fees and what the consumer or lender is being charged for the service. The plan is to present the information at the Appraisers Board’s Sept. 19 meeting. Mier hopes an annual report stating customary fees could be compiled, to which registered AMCs would have to adhere. State law currently requires customary and reasonable fees but doesn’t detail how fees should be disclosed, he says. —David Jacobs