Ask Henry

Dear Henry,
Hers how it goes: AMC A calls or emails a bid request for a single family appraisal report from lender B. If the fee and due date are acceptable I receive the engagement letter with the agreed fee and due date. Sometimes the same day or even up to 2 weeks later I will receive a second bid request from AMC B for fee and due date from same lender B for same property. Once I have an engagement letter from AMC A and they cancel order because someone else will do the appraisal report for a lower fee or quicker turn time do I have any recourse from AMC A.

Is lender B playing by all the rules once they have already committed to AMC A? I have a small office of 6 appraisers and we are seeing a lot of this lately. Besides being unethical does lender B have the legal right do this? The lenders doing this are nation wide banks and mortgage company's

Please advise and respond to
Patrick Solitz
Appraiser in Oregon
pjsolitz@uci.net
541-385-3181

Dear Patrick,
I wish I could say that this is the first time I have heard this story. Keep in mind that I am not a lawyer (though I have three children that are). In business law 101, they teach you that once both parties have agreed to something (it must be legal) both parties are bound to the contract and neither party can cancel the contract without being liable for either damages or specific performance.

Unfortunately, any legal action will probably result in the loss of one or both of the parties.

My advice is to start by giving both the lender and the AMC the benefit of the doubt that they didn’t realize what they were doing by informing both of them as to what they have done. I would first try to do this verbally and if not successful then in writing. Hopefully, when they realize what they done they will take steps to correct the problem by reinstating your first contact.

If this continues to happen in the future and you don’t care if you lose their business I would try a small claims action in court which you can do yourself. This will bring a whole new level of people at the companies involved and this sometimes results in a correction without the loss of the customer.

If this does not work either forget it or hire an attorney keeping in mind that this will only bring you satisfaction as most likely you will never collect enough to pay the attorney fees.
H2