Appraising appraisals: New study released on remuneration for real estate appraisals in Virginia
Virginia Tech researchers and students conducted a survey of Virginia residential real estate appraisers to analyze the patterns of fees earned in 2013. Prior to the release of this report, no data existed that defined “customary and reasonable” residential real estate appraisal fees in Virginia.
This report is the third report of its type to be conducted in the United States, and the first in Virginia.
The research was conducted in response to recent amendments to the Truth in Lending Act modified by the Wall Street Reform and Consumer Protection Act, also known as Dodd-Frank. This legislation requires lenders to pay appraisers a “customary and reasonable fee” for residential real estate appraisal services in their geographic market.
Mark White, president of the Virginia Coalition of Appraisal Professionals — a non-profit appraiser advocacy organization — and a certified general appraiser in Roanoke, Virginia, said, “VaCAP is pleased to have had the opportunity to lend its support to the Virginia Center for Housing Research and the Virginia Tech Program in Real Estate's survey. This survey provides an undisputable benchmark by which stakeholders can measure compliance with Dodd-Frank's customary and reasonable fee mandate and aid in promoting and maintaining a high level of public trust in the appraisal profession.”
- The full report is available through the Virginia Center for Housing Research at Virginia Tech and the Program in Real Estate’s websites.
Researchers and students from the Virginia Center for Housing Research and the Virginia Tech Program in Real Estate conducted the research over the spring and summer of 2014. Nearly three hundred appraisers from across the commonwealth responded to the survey, describing the levels of fees they earned for various types of residential appraisal services.
Their responses included information on fees earned when working for appraisal management companies and fees received when working on non-AMC appraisals. Where Dodd-Frank explicitly prohibits data from AMC appraisals to factor into customary and reasonable fee estimates, gathering information on all types of fees earned was crucial for the study to understand the appraisal fee structures in Virginia.
The Dodd-Frank legislation defines a customary and reasonable fee as one that would be received for, “comparable appraisal services performed in the geographic market of the property being appraised.”
The study found that the average non-AMC fee for a single-family residential appraisal in Virginia is $401.
This is the best estimate of a customary and reasonable fee for this type of appraisal service. Another important finding of the research is that the fees reported by appraisers for AMC appraisals are much lower, at $328 for a single-family residence.
Further, there was no evidence of a systematic influence on fees by geography.
The study also found that 60 percent of appraisers are 51 to 65 years of age and earned between $50,000 and $150,000 from appraisals conducted in 2013. These results indicate a profession that offers very good opportunities for young professionals entering the industry.
The research team was led by Andrew McCoy, director of the Virginia Center for Housing Research at Virginia Tech and Kevin Boyle, director of the Virginia Tech Program in Real Estate.
Andrew Sanderford, a post-doctoral research fellow at the Virginia Center for Housing Research, and now an assistant professor at the University of Arizona; Aurelia Amoyaw of Manassas, Virginia, a senior double majoring in real estate and building construction; Weibin Xu, of Shanghai, China, a doctoral student in agricultural and applied economics; and Melissa Jones, associate at the Virginia Center for Housing Research provided research support.
“This project provided support for students to provide information to industry decision makers on a topic of national interest,” said Boyle. “This type of collaboration is precisely what the Virginia Center for Housing Research and the Program in Real Estate Program are designed to do — bring students, industry leaders and university faculty together to lead the conversation about important and timely industry issues.”
“This work provides input from key stakeholders affected by housing policy in the commonwealth but who are not always part of the conversation,” said McCoy. “Collaborations such as this continue to reinforce Virginia Tech’s understanding of the most critical issues facing the housing industry and its ability to diffuse that information to the next leaders of our industry.”
The Virginia Center for Housing Research at Virginia Tech is the official housing research and information center for the Commonwealth of Virginia and is an interdisciplinary college research center in Virginia Tech’s College of Architecture and Urban Studies. The center provides services to localities, the state, federal agencies, nonprofit organizations, and for-profit businesses.
The Virginia Tech Program in Real Estate is an interdisciplinary undergraduate program support by six colleges that offers undergraduates a course of study that integrates critical knowledge from disciples such as finance, law, and property management through practical experiences within the academic program. The integration occurs though a university-industry partnership where real estate professionals are actively involved in students’ education through guest lectures and mentoring experiences and by providing internship opportunities.
Dedicated to its motto, Ut Prosim (That I May Serve), Virginia Tech takes a hands-on, engaging approach to education, preparing scholars to be leaders in their fields and communities. As the commonwealth’s most comprehensive university and its leading research institution, Virginia Tech offers 240 undergraduate and graduate degree programs to more than 31,000 students and manages a research portfolio of $513 million. The university fulfills its land-grant mission of transforming knowledge to practice through technological leadership and by fueling economic growth and job creation locally, regionally, and across Virginia.