Despite continued concerns on the part of the Bahamas Real Estate Association(Association (BREA) concerning compensation rights over intellectual property and who gets to provide appraisals, the association's president believes that the organization and local banks who wish to implement a new appraisal system may be moving closer together in their positions.
However, recently-elected president Carla Sweeting, of ERA Dupuch Realty, said that the banks must be careful that they do not "dictate" unsatisfactory terms to Bahamian appraisers, or they may end up stuck with the very sub-par appraisers who they would rather rid from their systems.
Commenting after an information session held by the Royal Bank of Canada (Bahamas), one of two banks in The Bahamas that wish to implement the Nationwide Appraisal Services appraisal system (NAS), Sweeting said she felt the two sides - who have been at odds over the agreement since late last year - have made some progress in their discussions.
"They came with a version of the agreement that came directly from NAS first. That was rejected. This was the third edition I think they've made, and they insisted on having a meeting this morning with members of the association and particular appraisers to discuss and explain the changes.
"To be honest I don't think we've gained too much ground in that it's ultimately a NAS agreement, but I feel like we have made some progress because what they've said is that we should go back to them with our concerns."
NAS markets itself as Canada's "premier appraisal management company and most comprehensive source for real estate valuations". RBC (Bahamas) and Scotiabank (Bahamas) both wish to utilize the system to obtain and manage valuations of properties in The Bahamas. NAS would act as an intermediary between the banks and appraisers.
Late last year and early this year many realtors suggested that the system would be a major blow to their businesses if implemented, potentially reducing business levels, taking away ownership of their intellectual property and impacting compensation levels and liability, among other issues.
The BREA president said she has made it clear that appraisers "will not be dictated to" by the banks or NAS on the issue.
"I don't want them dictating to us or the customers who you have to use. The other thing is the fee structures because appraisals are based on various things but certainly the location, the size and the amount of work involved."
"We want to make sure the customer still has the right to choose an appraiser of their choice. And obviously there are concerns about the intellectual property rights. That verbiage is still very gray and wishy-washy - who owns that information that we've now given to you. Then they throw it back and say if there's a lawsuit, it's your fault. They want get the benefits with none of the downsides," said Sweeting.
The BREA president added that she can "totally understand where the banks are coming from" with respect to their desire to implement the system, but cautioned that their intentions could backfire.
Inexperienced appraisers and a lack of data have been blamed for some of the banks' challenges in handling the high level of foreclosures on their books.
"They've got a ton of foreclosures. Their head office and risk people are saying we need a format whereby we can look at whether (for example) it is the size of the house or the location that causes them to be foreclosed. So having this system, I get it. I understand you want to go on a line item and say how many houses in foreclosure are this size, but I stressed with them we want to have a happy long-term relationship with the banks, but they have to be respectful of us as we are of them. Just because this is how you do it in your home country doesn't mean that's how it happened here."
"You can't put us all in the same bubble and dictate to us how it's going to be done. You don't want the good appraisers pushed aside because they also have sales and rentals that they can fall back on; some of the little guys who only do appraisals are the ones you may have to fall back on, and they are the very ones you want to get away from."
Sweeting noted that other banks have imposed strict guidelines on appraisals, seeking to ensure quality in this manner rather than imposing a foreign appraisal manager.
The BREA president is hoping to collate feedback from members on the latest draft of the NAS agreement by tomorrow, in order to present their position to the banks and NAS. It is then to be seen if their feedback will prompt compromise, said Sweeting.

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