The Appraiser Shortage Myth Part 43

[DWiley]

The combined system- scorecards like report cards at school, an appraiser with a faster turn time getting a better score, the 48 hour turn time expectation with pressure around it, combined with low fees in many areas- and then they wonder why there is a possible future appraiser shortage? It's laughable except the affect on the profession is not a laughing matter.

Absent some sort of rating and ranking system, how would you identify who the best available appraiser is?

Sorry, I do not support any kind of socialist notion that everyone is inherently entitled to an equal share. I should not be forced to use average or below appraisers when good appraisers are available. Of course, in my 35+ years in this business I have never met an appraiser who thinks that he/she is below average, even though the math says that half of them have to be

 

[J Grant]

Absent some sort of rating and ranking system, how would you identify who the best available appraiser is?

Sorry, I do not support any kind of socialist notion that everyone is inherently entitled to an equal share. I should not be forced to use average or below appraisers when good appraisers are available. Of course, in my 35+ years in this business I have never met an appraiser who thinks that he/she is below average, even though the math says that half of them have to be

A regional manager who actually reads the reports for content knows who the best available appraiser is, no scorecard rating system needed.

Your scorecard has quality as one ranking metric, the rest of the scorecard rankings are turn time and fee and service such as how fast revisions are done. Which may be important to your company's bottom line, but have nothing to do with work credibility/r quality or who is the best appraiser available.

 

[Eli]

No wonder the cry for shortage!

I wonder how many licensed appraisers would jump back in and hire trainees if it were not for AMC's.

There are many licensed appraisers not doing any. And not because they are not able.

 

[J Grant]

Absent some sort of rating and ranking system, how would you identify who the best available appraiser is?

Sorry, I do not support any kind of socialist notion that everyone is inherently entitled to an equal share. I should not be forced to use average or below appraisers when good appraisers are available. Of course, in my 35+ years in this business I have never met an appraiser who thinks that he/she is below average, even though the math says that half of them have to be

Folks, please do not get distracted by the dog whistle words about socialism and entitlement. It is a way to divide appraisers and detract from the issues at hand. That is a whiny scare tactic that your company would have to use an avg appraiser if good ones were at hand if n "equal share" was imposed (which it is not , and never will be so why the big scare tactic-to distract from realtiy)

The reality is that the AMC' will use an average appraiser if their fee is lower, rather than a "good" appraiser-(good in terms of work quality) Your own scorecards rate which appraisers are "good" so it s a closed system- and a good score card is weighted around metrics which enrich your company's bottom line such as lower fees and fast turn times.

Appraisers asking for the AMC to get their hands off the fee is not the same as equal share entitlement mentality. The direct lenders we work for can stop giving us work tomorrow if the quality is not there. Same with the one AMC I work for, who is the only one in my area paying decent/with a history of loyalty and does not do scorecards. .

Since you bought it up, SL and the AMC's are the ones getting an entitlement from the system- entitled to take part of the appraisal fee paid by borrower due to the fee blended fee provision in the HUD, instead of the AMC competing and pricing like every other business -charge your lender customer for your service.

 

[Evincere]

D Wiley said; ]G lives in one of the states with a huge supply of appraisers, yet seems to think that that huge supply should have no effect on her fees. That is no more realistic that a builder in 2009 thinking that he/she should still be able to sell houses at the "old" prices despite the fact that the housing market was flooded with inventory. Supply and demand just does not work that way.

It is not JUST supply and demand Danny, because lender direct work ( with no AMC taking a cut ) Pay very different rates ( they pay C and R) , in MY area, with the same "huge supply" of appraisers- I get between $400-$500 from direct lenders for the same type of order an AMC pays $250-$325 for. So tell me, is it just supply and demand, or is it AMC taking a cut of the borrower paid appraisal fee?

One other thing - both AMCs and direct Lenders have access to the same supply of Appraisers.

Why else do you think your (and other) AMCs are having a difficult time placing orders. The work is getting done, albeit at the selection and discretion of the Appraiser who in all probability, chooses not to deal with the AMC model. IOW. Lenders and AMCs have access to the same appraisers.

 

[DWiley]

Your scorecard has quality as one ranking metric, the rest of the scorecard rankings are turn time and fee and service such as how fast revisions are done. Which may be important to your company's bottom line, but have nothing to do with work credibility/r quality or who is the best appraiser available.

Actually for our scorecard it is:

Quality 67%
Service 33%
Fee 0%



I have told you this many times, but you keep asserting things that just are not true. From a pure business standpoint, the best thing I can do is select an appraiser who will provide a report that can be submitted to the client with no revisions, and can do that in a timely manner.

 

[Evincere]

Actually for our scorecard it is:

Quality 67%
Service 33%
Fee 0%



I have told you this many times, but you keep asserting things that just are not true. From a pure business standpoint, the best thing I can do is select an appraiser who will provide a report that can be submitted to the client with no revisions, and can do that in a timely manner.

See, the problem is that you engage appraisers in these shortage debates based upon your company's business/selection criteria. And I get how you would want to defend it. However, as many times as you tell us about yourself and your company, unless you can honestly tell us that the selection methods you apply are applicable to all AMCs across the board the arguments you offer which more or less defend the AMC model are ancillary, anecdotal and not applicable to other AMCs. What happens is that by defending your own practices you come across as the good will ambassador for all AMCs

 

[DWiley]

One other thing - both AMCs and Lenders have access to the same supply of Appraisers.

They certainly have the same opportunity. The difference is that the AMC has typically pre-screened a large number of appraisers and the lenders typically have not. It is one of the reasons that lenders pay AMCs for their services.

As for fee differences, that is on the appraisers. They are the ones selling the service, so they set the price. Just as I do not understand the market prices for some homes - for example, I do not understand why the market value for "modern" highrise units with unfinished concrete floors and open ceilings is often higher than nearby units with wood flooring and finished ceilings - I do not understand the market prices for some appraisal services. But, I don't set those prices; I merely observe and analyze them - just like I do for those condo comps.

I think most appraiser do not charge nearly enough for certain services - 1004Ds and 2055s come to mind in particular. With the changes made in 2005 doing a 2055 is almost the same work as doing a 1004, yet prices, for the most part, for a 2055 are still well below 1004 pricing. My fee for a 2055 was just barely less than my fee for a 1004. As a result, I did not do many, because others in my market would do them at a 30% to 40% discount off the 1004 rate and I would not I did not whine about that, I just let others do it at their price.

 

[J Grant]

Actually for our scorecard it is:

Quality 67%
Service 33%
Fee 0%



I have told you this many times, but you keep asserting things that just are not true. From a pure business standpoint, the best thing I can do is select an appraiser who will provide a report that can be submitted to the client with no revisions, and can do that in a timely manner.

That is your scorecard, I've seen ones from other AMC's where fee is part of it. The AMC's learn over time how to evade regulatory scrutiny and if it helps in that regard they will drop the fee from the scorecard, but they still use fee to select and exclude.

Your scorecard has 33% ranking for service- and barring late delivery, service has nothing to do with appraisal quality. The appraisal report stays with the file for life of loan - decades, and at point of loan origination hundreds of thousands of dollars at stake- why should whether an appraiser delivers in 46 hours or 48 hours have any part in selection (rhetorical question, sarcasm)

And the deeper question is what is the 48 hour expectation and higher scores for faster delivery doing to appraisers' ability to concentrate, focus, devote time to research for each assignment.

Fee is 0% on the scorecard. Yet when an assignment is awarded, fee is a very important part of the selection, since those appraisers with higher fees are never contacted about an assignment ( or don't get it if their fee is higher- your scorecard as long as appraiser has a good score ( influenced by service ), which excuses selection of fee as a supposed tie breaker, so it is a closed loop .

 

[Evincere]

They certainly have the same opportunity. The difference is that the AMC has typically pre-screened a large number of appraisers and the lenders typically have not. It is one of the reasons that lenders pay AMCs for their services.

.

Really? Pre-screened? License,verification of license E&O, check for board complaints at website, possible samples, psych tests, personal one on one interviews? I mean seriously, are you taking DNA samples now? Because I don't buy one bit your claim regarding the differences. What you're saying is that Lenders are negligent in performing due diligence and ignoring the abyss of current regulations. In today's atmosphere, with today's online verification resources - if they are going to send orders direct, compliance resources are readily available.

Me thinks the real difference is that once a Lender builds a satisfactory panel and begins working with a competent appraiser who meets all their criteria they do not eschew them because another Appraiser comes along with a $25 less differential. There is more invested and more to be gained in getting the loan closed than there is in playing the shell game over the Appraisers fee.

Hence, they may actually choose to work with fewer but that does not limit their access or availability to more. Quantity does not always equate to quality.

if direct Lenders are paying the higher fees they most certainly speaks to the old adage, more (large numbers as in quantities) does not equate to "quality"