Dart Board Newsletter – november 2017
Welcome to the November issue of our Dart Board newsletter. As 2018 moves ever closer into view, I wanted to share information on how we set our pricing each year. I’ll also continue with our “behind the scenes” look into Dart’s processes, this time covering the management of our appraiser panel.
Pricing. As Dart’s pricing is primarily based on appraiser fees, any discussion about pricing has to begin with an explanation of how we establish our customary and reasonable fees. As an agent of the lender, Dart Appraisal’s process of establishing customary and reasonable fee schedules has been set using the parameters prescribed within TILA’s first presumption of compliance. Under this first presumption, a creditor and its agent are presumed to be in compliance if they have established fees by doing the following:
- To be customary, the fee must be related to recent rates for comparable appraisal services in the relevant geographic market; and
- To be reasonable, the fee must be adjusted as necessary to account for six specified factors that, in addition to geographic market, affect the level of compensation appropriate in a given transaction. The six factors include(1) the type of property; (2) the scope of work; (3) the time in which the appraisal services are required to be performed; (4) fee appraiser qualifications; (5) fee appraiser experience and professional record; and (6) fee appraiser work quality.
- To be reasonable, the agent must also not engage in any anticompetitive actions, in violation of state or federal law, that affect the appraisal fee, such as price-fixing or restricting others from entering the market.
Our process to determine what is customary and reasonable is done by analyzing payment data made to appraisers within the past 12 months. (Dart’s appraisers set their own fees within our system, and can update them at any time.) Using this data, we have created a customary and reasonable fee range for each county tier by state and product group. Fee adjustments are made to account for the six specified factors (property type, scope of work, time, qualifications, experience and work quality). Appraiser payment information is reviewed on a quarterly basis and appropriate adjustments are made if payments are not within the current customary and reasonable fee range.
Pricing is reviewed on an annual basis and, when appropriate, a new schedule will be published to reflect market changes. We are currently finalizing 2018 pricing for all of our clients, and expect to have the majority of our client price sheets distributed by December 1.
Vendor Management. Dart’s Vendor Management Team assists with the vetting process for our panel appraisers. Our appraisers are independent contractors for Dart; we have county-level coverage for every state in the country, plus Guam, Puerto Rico and the US Virgin Islands.
Our Vendor Management team proactively recruits when needed due to turn time extensions and appraiser coverage. They also recruit appraisers, as needed, on a per file basis. (File-specific recruiting is a fairly rare occurrence; we use an existing panel appraiser for 97% of our orders.) Dart also has staff appraisers employed in key markets where turn times have posed a problem for other AMCs, and we continue to add staff appraisers to improve efficiencies for our clients.
Dart’s system is integrated with ASC.gov and HUD.gov, so the appraiser data in our database is vetted directly against the National Registry of State-certified and licensed appraisers. This includes licensure and certification information, disciplinary action and the current status of the appraiser. Appraisers are not eligible to receive assignments if they have an expired license or are facing a disciplinary action. They are also not able to login to our website if they have any expired documents, including license and/or E&O insurance.
We’ve spent more than two decades building relationships with our appraiser panel. That loyalty we’ve built with our appraisers has shown to be a true benefit to our clients in today’s market, where appraisers are often facing an over-supply of assignments. We continue to build on that loyalty through a variety of channels, including coaching calls with our Chief Appraiser, relationship-building calls from our Vendor Management team, as well as regular email communication. We also host several in person networking events throughout the year – last month we were in Houston, next up we’ll be hosting events in Portland, OR and also in Metro Detroit where Dart is headquartered.
Thanksgiving. We at Dart Appraisal want to extend our thanks to all of our valued clients and brokers for their continued partnership, and for allowing us to provide your appraisal management services. Dart Appraisal will be closed on Thursday, November 23 in observance of the Thanksgiving holiday, and will reopen at 8am EST on Friday, November 24.
As always, if there is anything we can do to assist you, please don’t hesitate to contact me at email@example.com.