Be the Driver, rather than just a passenger of your appraisal practice

[Sadie]

My hit rate on AMC orders went up when I started offering more than just my fee and turn time. I got in the habit of explaining the factors that made the property unique, and my qualifications for appraising that property.

This property is located in a historic neighborhood where neighborhood boundaries and proximity to the lake will be important factors in the valuation. I have studied these factors and appraised many such properties in the area over the past several years. My fee to complete this appraisal is X and I can have it delivered within X business days of acceptance, pending access.

Even if they only ask for “fee/TAT” it is just smart business to give them more.

That said, this doesn’t always work because there are bad AMCs that only consider fee and turn time. On one occasion I lived on the same block as the property to be appraised, I offered a great pitch at my standard rate and lost. The appraiser selected was someone from 45 miles away that had a “mobile appraising unit” and cranked out 3-4/day from their van. I reached out to the AMC rep later and asked why I wasn’t selected and she told me my fee was fine, it was because I quoted 5-7 business days and the other firm could get it done sooner.

So in my experience some AMCs might do their best to follow the regs while others clearly do not. Quite like appraisers, lenders, and every other regulated profession.

One rarely does that work with the AMC's. Someone here is bidding and scrapping the bottom of the barrel with fees. There is a new appraisal firm that has as part of its benefits has a department that auto accepts any appraisal coming their way regardless of fee. No negotiation etc. It kind of sucks for us standard fee appraisers.

 

[glenn walker]

One rarely does that work with the AMC's. Someone here is bidding and scrapping the bottom of the barrel with fees. There is a new appraisal firm that has as part of its benefits has a department that auto accepts any appraisal coming their way regardless of fee. No negotiation etc. It kind of sucks for us standard fee appraisers.

WHAT is a standard fee appraiser??

 

[glenn walker]

One rarely does that work with the AMC's. Someone here is bidding and scrapping the bottom of the barrel with fees. There is a new appraisal firm that has as part of its benefits has a department that auto accepts any appraisal coming their way regardless of fee. No negotiation etc. It kind of sucks for us standard fee appraisers.

Let's pretend someone on here is scraping the bottom of the barrel fees. Is that a crime ? AM I going to send them money to pay their bills or feed their family ?? No so why would I berate them and emotionally bully them. If they make it into the next boom and you are broke working at Taco Bell who was the smart person? Pride comes before the fall.

 

[Fernando]

One rarely does that work with the AMC's. Someone here is bidding and scrapping the bottom of the barrel with fees. There is a new appraisal firm that has as part of its benefits has a department that auto accepts any appraisal coming their way regardless of fee. No negotiation etc. It kind of sucks for us standard fee appraisers.

Back in Great Recession, I heard some appraisers were using some sort of auto accept and grab orders before I could get it for this lender. I wasn't aware of such technology.
Later client had some sort of reCAPTCHA to show I'm not a robot. It worked because I was able to get lots of orders afterwards.

 

[RCA]

Your deposition in the LA case I posted on the forum tells a different story about who sets the appraisers' fees. It was stated in the Danny Wiley deposition in the LA case that your employer AMC set the appraisers' appraisal fees. Should I post again that deposition in the case? No need to tell me that LA case was lost, its not relevant to the issue of AMC's setting the pay to appraisers. Why do I get 20 bid requests a week seeking my fee quote on an appraisal when the seeker of the bid already knows my established fee? Have never had an AMC assign me a job, they are all seeking a low fee and fastest turn time.

I think some AMCs do set the fees at least some of the time. They just state the fee on the order request, rather than asking for a bid. It appears in many cases whoever answers first saying they can get the job done by the requested date, gets the job. You never know though. They are all probably somewhat different.

It is kind of immaterial. They send an order request. The fee they state if they state it, doesn't matter. - You just reply one way or another your fee and the date you can get it done with any additional stipulations. They accept or reject your offer. You can try to follow up if they reject to find out why - for what it is worth - you are not likely to get a completely truthful answer.

If you had all information and knew what everyone was thinking and how they made decisions, I would bet that the central theme in everything is:

1. [For the AMC:] Take the path of least resistance with respect to all parties involved; in particular with respect to the client whoever that is. Try to keep the machine oiled and running smoothly. [ In reality, this is more important than any stipulations in USPAP that are not usually enforced or cause problems. And in any case, from the AMCs perspective - any improprieties with respect to USPAP and other regulations can be channeled to the appraiser's E&O.]
2. [For the GSEs] (1) Maximize profits. (2) Try to get rid of bad loans by blaming the lender for doing something wrong that the GSE didn't catch up front.
3. [For the Lender] (1) Maximize profits. (2) Make yourself the world's most popular lender by providing good customer service.. (3) Set things up such that others can be blamed for any problems that might arise.
4. [For the appraiser ] (1) Make sure to keep yourself supplied with aspirin or advil, - and plenty of coffee.

 

[J Grant]

I think some AMCs do set the fees at least some of the time. They just state the fee on the order request, rather than asking for a bid. It appears in many cases whoever answers first saying they can get the job done by the requested date, gets the job. You never know though. They are all probably somewhat different.

It is kind of immaterial. They send an order request. The fee they state if they state it, doesn't matter. - You just reply one way or another your fee and the date you can get it done with any additional stipulations. They accept or reject your offer. You can try to follow up if they reject to find out why - for what it is worth - you are not likely to get a completely truthful answer.

If you had all information and knew what everyone was thinking and how they made decisions, I would bet that the central theme in everything is:

1. [For the AMC:] Take the path of least resistance with respect to all parties involved; in particular with respect to the client whoever that is. Try to keep the machine oiled and running smoothly. [ In reality, this is more important than any stipulations in USPAP that are not usually enforced or cause problems. And in any case, from the AMCs perspective - any improprieties with respect to USPAP and other regulations can be channeled to the appraiser's E&O.]
2. [For the GSEs] (1) Maximize profits. (2) Try to get rid of bad loans by blaming the lender for doing something wrong that the GSE didn't catch up front.
3. [For the Lender] (1) Maximize profits. (2) Make yourself the world's most popular lender by providing good customer service.. (3) Set things up such that others can be blamed for any problems that might arise.
4. [For the appraiser ] (1) Make sure to keep yourself supplied with aspirin or advil, - and plenty of coffee.

The appraiser sets the fee , though technically might be the case ( which is how AMC;s get away with it, ) the reality is the appraiser sets the fee is nonsense - because an AMC will only assign the orders to appraisers who "set" their fee below X $ benchmark - whether X $ is below what other appraisers bid, or X$ among the lower fee tier on file.

the AMC was supposed to function as a firewall post HVCC and DF -fine,. The AMC provides a service for lenders to manage appraisals at scale, fine . The AMC getting their income by lowering the amount an appraiser gets from the HUD bundled fee - not fine.

Simple solution is pass through the borrower paid fee/ a set fee in region at C and R that borrower paid cover, and lender pays the AMC for the AMC service that benefits the lender - and lender can pass that AMC management fee to the borrower as a separate line item on the HUD ( or not, that is their end of the biz )

 

[CGinMN]

One rarely does that work with the AMC's. Someone here is bidding and scrapping the bottom of the barrel with fees. There is a new appraisal firm that has as part of its benefits has a department that auto accepts any appraisal coming their way regardless of fee. No negotiation etc. It kind of sucks for us standard fee appraisers.

Lenders and AMCs, like appraisers, are best served if they are diversified. That means not sending (or receiving) too much work to any one source. No one player can have that much influence on your business, unless both the AMC and appraiser choose to be poorly diversified.

If appraisers skated on relationships with one or two clients over the past several years, it’s going to be a long winter, possibly lasting several years. If they auctioned of their services to the highest bidder, without considering other factors such as how that would impact their business model when the RE cycle shifted, then that’s a pretty big business error IMO.

I’m not suggesting there isn’t some pain ahead for everyone, there is. But, those that planned for this won’t be the ones coming here to complain about their book of business.

 

[glenn walker]

Its so crazy how so many really believe that by separating fees the appraisal world would chnage, Again the ship sailed in 2012 and its not coming back, so get over it and move forward.

 

[Sadie]

Lenders and AMCs, like appraisers, are best served if they are diversified. That means not sending (or receiving) too much work to any one source. No one player can have that much influence on your business, unless both the AMC and appraiser choose to be poorly diversified.

If appraisers skated on relationships with one or two clients over the past several years, it’s going to be a long winter, possibly lasting several years. If they auctioned of their services to the highest bidder, without considering other factors such as how that would impact their business model when the RE cycle shifted, then that’s a pretty big business error IMO.

I’m not suggesting there isn’t some pain ahead for everyone, there is. But, those that planned for this won’t be the ones coming here to complain about their book of business.

The AMC's assign by appraiser, not by appraisal firm. If you have several appraisers working for a firm that auto accepts, well then that is several appraisers that are auto accepting low fees for everything.

 

[CGinMN]

IMO part of good business is understanding how your clients' businesses operate so you can decide if you want to work with them. If you are unhappy with your clients’ business practices, aren’t you ultimately unhappy with the book of business you built?