1004p

[Terrel L. Shields]

because we still have too many heads chasing too few assignments.

Perhaps, but I know locally when most of us were getting $325 (in the 00s) a friend was taking $295 orders and then $265 orders and accepting them simply because she thought she had to accept the offer or not work... i.e.- never negotiated a better fee. Finally when it got below $250 she started turning work down. Only a couple of the newbies were taking $250 and in the midst of a downturn, most of those went kaput anyway.

 

[J Grant]

I had someone (local) tell me a couple months back that the AMC he was getting most of his work from lowered their base fee from $275 to $235. Because they could. Now granted he is a junior appraiser with less than 10 years in, but when the fees are that low you know it's because we still have too many heads chasing too few assignments.

Dropping the degree is contributing to a new crop of "too many heads" , but it is beyond that, it is caused by the AMC getting their profit fom a spread between what lender pays them and what the AMC pays appraiser. Because this is being so badly abused, it needs to stop. It will stop as soon as the relationship between AMC profit and what they pay an appraiser stops..

It should not take an appraiser shortage to finally get an AMC to pay decent fees.. If it gets to that point lenders have backlog issues too many good appraisers have exited.

Most fields have an ample supply or over supply of professionals, and we don't see what we see in AMC fees , it is a level of exploitation that should not be part of tax payer backed mortgage work

AMC;s should no longer be involved in appraiser fees, let them do all other management tasks but leave fees between the lender and the appraiser. Lenders pay reasonable C and R because they are not using appraisals as a profit cash cow. Let the lender decide what they want to pay the AMC for AMC service, and divorce AMC compensation coming from how little they can pay an appraiser.

 

[George Hatch]

I disagree. I think that - regardless of the qualifications criteria - not one trainee can get in without a supervisor enabling them. Just the same as not one 1004 can get done at $250 unless an appraiser decides to take that assignment at that fee. And while we're at it, not one marginal deal can get done at a lender without an appraiser certifying that it looks good to them.

That makes our primary problem our own peers. Not our clients, not the trainees, not the gov't and not TAF. Thus it has always been and thus it will always be.

 

[J Grant]

We can';t blame the problem solely on our peers, if working conditions favor "rewarding" the worst peer behavior ( piling on volume for cheap , or hitting value etc ) . When business conditions promote desperation among peers, it results in excluding the more qualified peers from assignments for not number hitting or charging a modest amount more to do a thorough job.

Since this is taxpayer backed work and housing market health and secondary investors rely on results, letting the abuses dictate peer behavior has to stop. It stopped to a degree post HVCC but now is back with a vengeance. For better or worse this is a regulated area of practice and when regulations allow lenders or AMC's to be rewarded for worst practices ( AMC fee abuses and free ride for lender with AMC management or lender back door AMC profit return) than it is time to put a stop to it.

 

[Michigan CG]

it is caused by the AMC getting their profit fom a spread between what lender pays them and what the AMC pays appraiser. Because this is being so badly abused, it needs to stop. It will stop as soon as the relationship between AMC profit and what they pay an appraiser stops..

There are two reasons appraisers take low fees. The first one is supply and demand. If there are too many appraisers fees go down. The second reason is some appraisers aren't very good at business.

The concept of opportunity cost in economics is similar to the principal of substitution in appraisal.

If an appraiser has the opportunity to make $400 per assignment then they are not going to take $250 assignments. If they have no other opportunities but $250 work then they are going to take it. It is not all on the AMCs.

As to being good at business, there are many appraisers who have only 3 or 4 clients which is downright foolish. If they only have 3 or 4 clients they are going to take what those 3 or 4 offer in terms of fees. If they are taking $250 fees and not looking for better clients they are again foolish.

While I do think most AMCs have an unethical business practice not all of the blame is on the AMC; appraisers have to share some of the blame.

 

[George Hatch]

Everyone "knows" that buying American would be better for US employment and the local economies. But IRL most people act in their own interests to the exclusion of what's best for the proletariat. Damn bougie wannabes.

 

[J Grant]

There are two reasons appraisers take low fees. The first one is supply and demand. If there are too many appraisers fees go down. The second reason is some appraisers aren't very good at business.The concept of opportunity cost in economics is similar to the principal of substitution in appraisal.
If an appraiser has the opportunity to make $400 per assignment then they are not going to take $250 assignments. If they have no other opportunities but $250 work then they are going to take it. It is not all on the AMCs.
As to being good at business, there are many appraisers who have only 3 or 4 clients which is downright foolish. If they only have 3 or 4 clients they are going to take what those 3 or 4 offer in terms of fees. If they are taking $250 fees and not looking for better clients they are again foolish.While I do think most AMCs have an unethical business practice not all of the blame is on the AMC; appraisers have to share some of the blame.

I agree that indeed, appraisers share part of the blame. But imo the larger share of the blame is on the AMC side ( and the lenders who use them and get free of cost service, ) Exception are lender and AMC cost plus..

Residential lending is cyclical, busy periods and slow periods. In busy periods, there was always an over supply of appraisers relative to demand, But not until the AMC rise post HVCC, , did it we see n slow periods of over supply produce very low fees to appraisers ! The reason is mortgage brokers and lenders can not keep a portion of borrower paid for themselves, thus have no incentive to drive the $ to appraiser down. The incentive is always there for AMC;s to drive down fees, it is just easier for them to do it in an over supply area or market cycle.

As far as appraisers being bad business people, some may be, but the lending market needs good appraisers, rather than good business people. Teachers may not be good business people, but young people needs good teachers for what they have to offer as educators, not for their business acumen. Same for appraisers, good ones are needed for their appraisal expertise.

 

[ucbruin]

Let's also blame the software providers....

 

[ramrcdk]

It's appalling how low some fees by AMC;s are - if an appraiser is getting $250 they are crazy to give any discount, but since they are already compromised, then if they are able to hold the line at a $50 discount, they are still starving but at least not driving around. If the AMC or their lender sees no discount they might drop the 1004P . My prediction is the 1004 P is far better suited to staff appraiser work so it might become more concentrated there.

Staff appraiser work, discounted fee, doesn't equate to existing. Sad to say. Would be glad to be wrong.

 

[ucbruin]

Just received an inspection request....
I'll try it to see if I like it....