The Appraiser Shortage Myth Part 43

[Evincere]

It is my thought that these folks are making money now and don't see it lasting. I also think that the AMC model is not acceptable and therefore they are not recruiting their kids to carry on the family business but I could be wrong.

I think, you are correct. We know how this business is and how it rises and falls to feast or famine levels. When it falls to famine levels again (and it will) the AMC screaming shortages won't give a hoot about trainees or lack thereof because they too will be affected.

 

[J Grant]

I posted this early in thread, post # 4

Regarding the COW states, one might expect the higher fees to draw cert appraisers in from other areas, and/or for existing appraisers there to take on trainees-the fact that is not happening points to two problems :

1) appraisal work on res lending end is cyclical, an uptick in interest rates can see volume plunge and income drop, for extended periods. That would wipe out any gain for an appraiser who moves there. and an appraiser who took on a trainee either has to let them go, or just created more competition for a low supply of work.
In addition they realize as soon as the COW states gains more appraisers, the AMC's will pick up the same tactics they use elsewhere to pit appraisers against each other and drive fees down.

 

[Michigan CG]

blaming the lack of trainees on low fees,

No doubt that there is a lack of trainees because of low fees. Are there other contributing factors? We still have AMCs that want to have reports turned in within 48 hours. To me that is unacceptable and I wouldn't encourage my kid to work for companies like that. What idiot is going to train a new appraiser when the fees don't at least start with a 4 or 5?

The question is, are the COW state people taking on trainees? Is the business good enough to have their kids carry on the business?

 

[The Warrior Monk]

Delivering 75% to 80% of reports in 48 hours is the goal, and we measure against that goal (otherwise, why have it?).

Over the past two years I have spent a lot of time looking at how appraisers manage their time. For a residential appraiser, managing appointments and overall assignment workflow is a large part of the business side of appraisal. Some are very good at that and some are not.

Some do live/work in areas where it is tough to do. But for those working in urban and suburban settings, it is simply a matter of efficiency and time management. I have a guy out in the Portland area right now. This time last year his turn time was at three to four weeks, and three weeks is still the norm in the area. But we worked together on time management - scheduling appointments, actually scheduling time to write reports, etc etc. Today he is making a killing because he is providing turn times that are 1/3 of his competition. He bills at a premium rate due to his service, and AMCs and lenders are very willing to pay, because they are getting something in return for that. All it took was using some very basic time management techniques. As you noted, bundling inspections is a huge part of that.

This is another reason there is a "shortage." There are a great many experienced appraisers that just cannot simply meet such time pressure. People like myself who do a mix of commercial and all types of residential (everything from cookie-cutter homes to large estate properties) simply cannot meet these time requirement. Therefore many appraisers are simply cut off from this type of work.

I only work with lenders that order direct. They consider a 5-day turnaround a rush assignment, and pay to have it turned around in that time frame, and that includes the cookie-cutters. 48 hour turnaround is a an automatic 4-figure fee, and we go up from there.

 

[hastalavista]

Trainees cost time and money as you pointed out. Where will the money come from? How were they paid for when they used to be around? Is there a direct correlation between the margins absorbed by the AMCs and the lack of trainees? These are the issues/points/questions I believe you over-shadow with your (previous) arguments about how the real problem is bad appraisers and once they get weeded out, all will be ok.

Fair enough. I thought I hit them and you thought I missed them (or played them second fiddle).

But if the AMC margins are what is squeezing out the funds necessary to support appraiser training, then the cost-plus model (something I'm in favor of) should take that off the table.
Yet, many are still say that won't solve the problem because there are still plenty of appraisers taking low fees regardless of what the AMC makes or loses; their solution is some kind of across-the-board fee increase and that will solve the problem. I don't see why it would? If I get an extra $100 in my pocket for not doing anything differently, why would I do anything differently (like training)? I wouldn't.
But if fees, due to demand, went up to $600+, as an entrepreneur, I'd certainly consider the options of expanding my firm and growing it.

Anyway, at least I think this thread is back on track (and I'll take my share of the blame for derailing it to whatever degree I did).

 

[Deleted member 130081]

i guess i missed that. she possibly did in one post but there are several, hell probably hundreds by now for the continuous top poster of the month, blaming the lack of trainees on low fees, which kinda goes against what is happening in COW states (the question i responded to).

LOL. Yea...just trying to be fair my friend. Hey, when you're (someone's) opinion is right, its right and when its wrong, its wrong, right? LOL. Funny how that works with all of us who get paid for our opinions.

 

[Eli]

Shill. It's hard to hop a fence. Congratulations!

Your good.

 

[The Warrior Monk]

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.

This must be something common in other areas of the country. Every single bank I've worked for has prescreened me (and not just the private banks; the local ones also). In some cases, I am required to be interviewed in person, via teleconference, or on the phone. References are almost always checked, sample reviewed, put on probation until they see my workproduct over time, etc.

 

[TRESinc]

Where do you get this Fees are higher crap from. Perhaps, with the exception of the COW states Fees have been stagnated at the same amount for years now and in some places, dropping. It's business that has picked up, not fees. We elsewhere are eeking out a living because of current market stability. We are NOT making a killing.

please try to keep up with the conversation and not selectively read. my post you quoted was answering the question posed ABOUT THE COW STATES.

 

[Evincere]

Are there other contributing factors? We still have AMCs that want to have reports turned in within 48 hours.

?

This among other issues is what perpetuates in part the low quality reports people scream about. Yet, they will not concede to changing the SOW to more reasonable time frames. How does a trainee get properly trained when their mentor is under a 48 hour performance mandate.