In response to a request from North Carolina Assistant Attorney General Roberta A. Ouellette, the directors of the Federal Trade Commission’s Office of Policy Planning, Bureau of Competition and Bureau of Economics have issued a comment on the competitive impact of proposed legislation affecting compensation for real estate appraisers in North Carolina.
The proposal, NC House Bill 829, would prescribe a single method for determining customary and reasonable appraisal fees paid to real estate appraisers by appraisal management companies (AMCs), which would preclude the negotiation of market-based rates. It would also direct the North Carolina Appraisal Board to adopt rules necessary to enforce the new law.
The comment states that the proposed method for determining customary and reasonable fees for appraisal services “is not mandated by – and, in fact, may be inconsistent with – federal law.” The comment also expresses concern that HB-829 “may have the effect of displacing competition for the setting of appraisal fees and ultimately harming consumers in the form of higher prices.”
The comment urges the North Carolina General Assembly to consider whether the proposed bill will “promote competition and benefit consumers. We are concerned that, if HB-829 were enacted, real estate appraisal fees in North Carolina might not be based on competitively-set market rates, and that AMCs – and, ultimately, consumers – might face higher prices for real estate appraisal services.”
The letter was signed by the Acting Director of the FTC’s Office of Policy Planning, Tara Isa Koslov, as well as Acting Bureau of Competition Director Abbott Lipsky and Bureau of Economics Director Ginger Jin. The letter expresses the views of the Directors of the Office of Policy Planning, Bureau of Competition, and Bureau of Economics. It does not necessarily represent the views of the Commission or of any individual Commissioner. The Commission did not review the letter and did not vote to authorize the submission of the comments.
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