Talking Fees and Antitrust


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Talking Fees and Antitrust

by Isaac Peck

Whether in online appraiser forums, Facebook groups or in the audience at a national appraiser conference, whenever the discussion turns to fees, some appraisers worry about running afoul of Federal antitrust laws. At an appraisal conference several years ago, a handful of veteran appraisers actually got up and exited the session when the discussion turned to appraiser fees!

Since then, at similar conferences, I have heard “cautions” to appraisers to avoid any discussion or even mention of fees. So how much concern is actually prudent?

Antitrust Law
Joseph Bauer, Professor of Law at Notre Dame Law School, is one of the most prominent experts in antitrust law in the United States. Bauer has served as a consultant to the Federal Trade Commission’s Bureau of Competition, testified on numerous occasions before Senate and House committees and subcommittees, and since 1985, has prepared the annual updates to a seminal work in antitrust law, Kintner and Bauer, Federal Antitrust Law, volumes I–XI. Bauer made time for a short interview with Working RE to help explain the issues involved in discussing appraisal fees.

As a foundation for understanding what kinds of discussions could be in violation of antitrust law, Bauer explains that it is unlawful to make an agreement that will restrain trade. Therefore, an agreement that is always unlawful is one that involves an agreement among competitors on price. But as the saying goes: it’s complicated. “One example I use is what my aunt asked me many years ago regarding the price of gasoline,” Bauer said. “As she drove down the street she saw the signs from three different gas stations selling gasoline at the same exact price. She said it didn’t appear they were competing with each other and isn’t that against the law?” The answer, Bauer says, is not necessarily.

“If all you have are independent behaviors, or even inter-dependent behavior, that’s not unlawful,” Bauer says. “What would be unlawful, however, is if the gas station owners talked to each other and agreed that tomorrow morning they were all going to raise their prices to $2.05 per gallon. However, if one owner raises his price to $2.05 independently and the others look out their windows, see the new price, and independently raise their prices to $2.05, that is not unlawful. The key question, which is a mixed question of law and fact, is whether they are in agreement,” says Bauer.

This same concept applies to a multitude of professions, including real estate appraisers and agents/brokers. “If appraisers who are competitors get together and decide they will charge a fee of $X, or if real estate agents all agree that they will charge a commission of 6 percent, that’s unlawful. However, if they each decide independently that $X is a fair price, or that 6 percent commission is a fair commission and that they can’t cover their overhead with less than $X, then that is lawful,” says Bauer.

Inviting Agreement
Since an agreement among competitors is a violation of antitrust law, the danger comes when one takes actions that could be seen as inviting agreement. So, if in an online forum or at a conference an appraiser says something like: “no one should accept less than $400 for a 1004 appraisal order”; is this problematic in terms of antitrust law? Bauer advises against making those kinds of statements. “It can be construed as inviting agreement among competitors. I can’t say that it is illegal but it is imprudent,” says Bauer.

It is not necessarily illegal to invite agreement, as it is the follow-through of the agreement that is the actual violation, Bauer explains. For example, if the appraisers in a forum or at a conference all agree to charge $400 or more, that would constitute an agreement between competitors as it relates to price, which is always illegal. “For there to be an agreement, there must first be an invitation to agreement. There have been several cases that speak to this specifically. If you invite agreement and nobody goes along with it, however, there is not an agreement. But if someone invites agreement and it is followed by a conversation among competitors that results in identical behavior, then that may qualify as an agreement,” says Bauer.

What about just discussing what you get paid as an appraiser? “My question for those who discuss pricing with their competitors is, why are you talking about what you get paid? Are you trying to invite agreement? You’re not bringing up price in the sense that you’re advertising low prices to your customers, are you? So again, you risk creating a perception that you are inviting agreement about fees,” Bauer says.

In general, sharing information between competitors is potentially problematic but what is most likely to be problematic is sharing information about current or future prices, according to Bauer.

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According to the Federal Trade Commission, antitrust scrutiny most often occurs when competitors discuss the following topics:
• Present or future prices
• Pricing policies
• Promotions
• Bids
• Costs
• Capacity
• Terms or conditions of sale, including credit terms
• Discounts

However, the FTC explains that it is often regular market behavior to monitor your competitor’s pricing and even match it. The FTC writes, “matching a competitor’s pricing may be good business, and occurs often in highly competitive markets. Each company is free to set its own prices, and it may charge the same price as its competitors as long as the decision was not based on any agreement or coordination with a competitor.”

While appraisers should be careful not to take actions that invite agreement regarding price, Bauer explains that it’s very unlikely that you will face trouble with the law for one or two misplaced comments. “The reality is that it’s unlikely that the local U.S. Attorney’s Office or the Department of Justice (DOJ) Antitrust Division is going to come down on you for your comments about fees, but if it is part of a larger pattern, you can get yourself in trouble,” says Bauer.

Who Is a Competitor?
If appraisers need to be careful not to invite agreement with their competitors, as it relates to appraiser fees, it begs the question: who is considered a competitor? Bauer points out that a competitor is someone who actually competes with you in the marketplace. “If an appraiser from San Diego and an appraiser from New York discuss their appraisal fees, this is unlikely to raise antitrust concerns. There is no law against conversations about fees among people who are not competitors. An example of competitors would be a group of three real estate appraisers who all belong to the same country club and get together on the golf course and talk about their fees. That’s the kind of conversation that could get you into trouble,” Bauer says.

As a result, the worry when fees are discussed at an appraiser conference, or even a Facebook group, is if there are appraisers present who compete with each other and may change their behavior based on what is discussed. For example, in a room of 100 appraisers, if pricing is discussed and three appraisers are present who all practice in San Diego, this may have the potential for an antitrust violation.

Training for Higher Fees?
In his articles, as well as his online and live continuing education (CE) classes (See How to Support and Prove Your Adjustments and Identifying and Correcting Persistent Appraisal Failures), Richard Hagar, SRA, advocates for appraisers to improve the quality of their reports in order to leverage their superior skillset to increase their fees and earn more. To demonstrate just how sensitive this subject can be, when the OREP Education Network was seeking initial approval from the Appraiser’s Qualification Board (AQB) for Hagar’s newest course, Identifying and Correcting Persistent Appraisal Failures, the only revision request from the AQB involved the discussion of fees in the course. In its letter to OREP, the AQB wrote: “Appraisal fees (by dollar amount) are discussed…this might be associated with price fixing/antitrust issues and should be deleted.”

We asked Bauer about these types of classes and training, where one professional is training other professionals about how to improve their work product and consequently, to increase their income and earn higher fees. “I would say that this likely not a problem, as long as you aren’t talking directly to your competitors about fees. You wouldn’t want to be training your direct competitors to raise their fees, but if you are training other industry professionals who are not your competitors, then that’s less of an issue,” says Bauer.

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Notable Case: Container Corp.
One of the landmark cases dealing with the sharing of information about pricing among competitors is United States v. Container Corp. of America in the late 1960s. In the case, the U.S. Department of Justice (DOJ) argued that between 1955 and 1963, Container Corp. and 17 other container manufacturers (defendants) developed and maintained a practice of sharing price information with each other upon request. At the time, the defendants made up roughly 90 percent of the corrugated containers market. While the defendants had no formal agreement, these market competitors provided price information to each other with the understanding that a request for information would be reciprocated in the future.

At the time, prices for corrugated containers were declining precipitously and the DOJ argued that the competitors/defendants were sharing price information in order to stabilize pricing. The Container Corp. case was eventually decided in the DOJ’s favor by the U.S. Supreme Court. In its decision, the Supreme Court writes that unlike prior cases where there was an agreement to adhere to a price schedule, “all that was present (in this case) was a request by each defendant of its competitors for information as to the most recent price charged or quoted…. Each defendant, on receiving that request, usually furnished the data… with the expectation of reciprocity and with the understanding that it represented the price currently being bid.”

So despite the lack of a “smoking gun,” in this case, the Supreme Court ruled that the “exchange of price data had an anticompetitive effect in the corrugated container industry, chilling the vigor of price competition” and resulted in “price stabilization.” In other words, the Supreme Court ruled that the mere sharing of pricing information among competitors, even though it was “not done on a regular basis,” constituted anticompetitive behavior and concluded that the defendants’ “tacit agreement to exchange information about current prices to specific customers did, in fact, substantially limit the amount of price competition in the industry.”

Notable Case: Colegio de Optometras
Another notable case that offers several parallels to the appraisal industry is FTC vs. Colegio de Optometras, which occurred in 2007 in Puerto Rico. The case involved market confrontations between The Colegio de Optometras (Colegio) and Ivision. Colegio is an association in Puerto Rico made up of over 500 optometrists, of which membership is required in order to hold a license as an optometrist. Ivision is a healthcare administrator that administers vision and optometric services in Puerto Rico for various health plans. In Puerto Rico, Ivision serves as a middleman between the health plans and the optometrist, paying optometrists only 50–60 percent of the fees that they earn when contracting directly with the health plan.

When Invision contracted with several new health plans and effectively inserted themselves between the optometrists and the health plan’s direct relationship, optometrists saw their fees decline by 40–50 percent. For example, while optometrists in Puerto Rico would make $50–55 per eye exam when working directly with a health plan, Ivision began paying them only $30 per exam once they contracted with the new health plans. Sound familiar?

Upon hearing the news, Colegio responded aggressively and held meetings with dozens of optometrists todiscuss Ivision and the loss of income the new pay structure would cause. The Colegio’s leadership sent out letters urging optometrists not to participate in Ivision’s network and threatened Ivision’s president that, if Ivision did not raise their rates, all optometrists would refuse to work for them. As optometrists began to leave Ivision’s network and refuse to work for lower rates, Ivision was forced to raise the rates they paid optometrists, upping their rate for an eye exam from $30 to $35.

The FTC ultimately charged Colegio with price fixing and conspiracy, acts, and practices that constituted “unfair methods of competition.” The final order issued by the FTC ordered Colegio and its leadership to cease and desist any attempt to “negotiate on behalf of any optometrist with any payor” and any organizing or encouragement of optometrists “to deal, refuse to deal, or threaten to refuse to deal with any payor.” The FTC further forbid Colegio and its leadership from “exchanging or facilitating in any manner the exchange or transfer of information between or among optometrists concerning any optometrist’s willingness to deal with a payor, or the terms or conditions, including any price terms, on which the optometrist is willing to deal with a payor.”

So when can appraisers discuss fees and with whom? Bauer says that there’s less to worry about when appraisers who are not competitors discuss their fees. However, if you find yourself discussing prices with one of your competitors, Bauer says he would question why. “An antitrust claim involves a combination of legal standards and is a question of law and fact. Overall, you have the greatest likelihood for antitrust problems when there are agreements (written, verbal, or implied) or conduct which could be construed as agreement between or among competitors,” says Bauer.

Sidebar: Antitrust and the Louisiana Appraisers Board
Any discussion surrounding appraiser fees and antitrust would be incomplete if it did not mention the current legal case of Federal Trade Commission (FTC) vs. Louisiana Real Estate Appraisers Board (LREAB) which is presently being litigated. Since 2017, the FTC has been aggressively litigating its case against LREAB, alleging that the Board is in violation of antitrust laws by attempting to restrain “price competition for appraisal services in Louisiana.” (See Louisiana Appraisal Board: Anti-Competitive?)

LLREAB was the first state board to take bold action enforcing a mandate that customary and reasonable (C&R) fees must be paid to appraisers per Dodd-Frank, first in an enforcement order with Coester VMS (First Enforcement of C&R Fee Provision: Louisiana Makes History), and again in a case involving iMortgage in late 2015 (see AMC Fined Over C&R Fees). The FTC specifically cites LREAB’s enforcement actions against Coester and iMortgage in its complaint and argues that such actions unreasonably restrain competition and harm consumers by raising “prices paid by AMCs for appraisal services in Louisiana above competitive levels.”

AMC executives have been predicting a showdown between the FTC and state appraisal boards ever since the Supreme Court’s decision in the North Carolina Dental case (Appraisers, Dentists and Antitrust Law), hoping for changes to the regulatory structure, which currently has AMCs regulated by appraiser boards on which appraisers sit. In other words, appraisers are “market participants” and therefore have a conflict of interest in the regulation of AMCs, which some would argue are an appraiser’s competitors. The FTC echoes this argument when it writes that actions taken by LREAB with respect to fees are anti-competitive because “appraiser members are licensed by the Board and have private interests in the Board’s acts and practices.”

The case is currently in litigation with dozens of motions and briefs filed by both sides. As part of its defense, LREAB has subpoenaed Clear Capital, Real Estate Valuation Partners, LLC, as well as the law firm Adam and Reese, LLP, all in an effort to reveal information about the percentage of appraisal fees being taken off the top by AMCs, as well as the lobbying efforts that have been undertaken by AMCs with respect to appraisal fees. This is a developing story and one that Working RE will be following closely. Visit for the latest news and analysis on the appraisal industry.


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About the Author
Isaac Peck is the Editor of Working RE magazine and the Director of Marketing at, a leading provider of E&O insurance for appraisers, inspectors and other real estate professionals in 50 states. He received his master’s degree in accounting at San Diego State University. He can be contacted at or (888) 347-5273.



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Comments (9)

  1. “It can be construed as inviting agreement among competitors. I can’t say that it is illegal but it is imprudent,” says Bauer.

    A lot of things can be misconstrued, without being illegal. Some years ago I published and submitted a proposal ( to the Board of Governors of the Federal Reserve among others) for calculating C&R fees across the nation using federal civil service pay scales as a foundation. Numerous self serving interests countered that “no one is going to tell me how much I must charge.”

    It was of course misdirection and diversion. “Follow the shiny baubbles” sort of thing. The entire point was to assure appraisers aren’t actually working for less than minimum wages; AND were in fact being compensated at levels commensurate with their professional experience and assignment complexities.

    Beyond appraiser interests consumers and taxpayers also have an interest in assuring that professionals are paid amounts sufficient to provide a reasonable expectation of competently performed services

    NO ONE in this nation should be charging significantly less than the VA base fee for their area for comparable work. WHY would anyone charge less than the government established and mandated fee for a service?

    I “invite” all appraisers in America to stop being damn fools who accept less than government mandated fees for any appraisal.

    I seriously encourage considering charging more. MY base fee for a non complex FNMA conforming loan limit UAR/UAD form report delivered via email in a pdf format is $550. Location-Urban/Suburban Los Angeles. IF the property or transaction amount requires a certified license level then the fee is more.

    Come get me FTC.

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  2. Pretty convenient for AMC’s, lenders to be able to claim appraisers can not or should not talk about fees. The more they keep us in the dark, and we have rely on them to provide us the information, then they have us exactly where they want us…….mainly at a massive disadvantage when it comes to fees. Which naturally works to the benefit of the AMC/Lender. And, we wonder why appraisal fees have been relatively stagnant for more than 30 years? Any other professionals charging essentially what they charged in 1985? No. Any other professionals you know of that are told they should take a job, whether it takes 8 hrs or 32 hrs for the same fee? No. And heaven forbid appraisers have some idea whether or not the crap we are told is factual or just that……crap. Call me cynical, but AMC’s lie to us all the time about virtually everything. Don’t believe it, make friends with a processor and talk to them when they ultimately leave the AMC and are free to tell you whatever they want. I have been in class with some of these people, and the stuff I have heard while on break makes me sick. AMC’s relish in bullying appraisers and despite the wording in Dodd/Frank, they do not choose appraisers based on qualifications; but solely on price assuming turn times are within a few days of each other. You can be the least qualified appraiser possible, but you give them a chance to screw you on a fee and you will get the job every time…… and we all know it. I personally am more than willing to talk about fees with other appraisers, and they are willing to talk to me. And I don’t charge what they charge, and they don’t charge what I charge. Though we are in the same general ballpark 90% of the time. Appraisers have been backed into a “dark corner” with most aspects of the business due to this BS that we can’t talk about our clients demands, fees, unrealistic expectations and so on. We are treated as if we should just sit down, shut up and deal with being treated poorly. NO! I refuse! I demand a decent fee, a reasonable turn time and to be treated as I treat them. Seeing the spinelessness of so many appraisers makes me very sad. Stick up for yourselves and the profession, lest you ultimately are part of the reason we cease to exist.

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  3. My recollection is a little vague but I seem to recall a Realtor making a comment at an Illinois real estate board convention that caused a government claim of attempted “price fixing”. It was a particularly bad time in the real estate sales market and the Realtor allegedly said something like, I DON’T KNOW ABOUT THE REST OF YOU–BUT IF I’M GOING TO GO BROKE AT 6%—I MIGHT AS WELL GO BROKE AT 7% AND I’M RAISING MY COMMISSION RATE. So if it’s true–be careful out there!

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  4. Considering most businesses in this country have good if not intimate knowledge of competitors pricing it only makes sense that appraisers should try to learn what others are charging. Anonymous sharing, such as the survey done by OREP must be legal or they would have been stopped long ago. It’s the only way appraisers will ever have a feel for what their competition is charging considering many companies who use appraisal services try to hide the cost. It would be interesting to conduct similar anonymous surveys at larger conferences and CE events. A valuable addition in those surveys would be to question whether the fees reported are for AMC work or directly for clients. That would lend some fact to the discussion.

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  5. Appraisers are one of the most fragmented groups that offer goods and services
    to the public. 77.2 % are one-man shops working out of a home office. Most only see each other once every two years for Cont. Ed. classes. Price fixing, you got to be kidding!

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  6. Has there ever been a case of antitrust concerning individual fee appraisers. In all my years appraising I’ve never heard of one.

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