Strategies for raising fees

[J Grant]

Tech consists of tools for getting things done or using the internet for sending digital data images, etc. We all have access to and can use the same tech. Yet an AMC offers me $300 for the same order I get from a direct lender or wholesaler for $525.

 

[George Hatch]

This BS of blaming tech has been disproven numerous times.

The day before, the HVCC fees were $500 to an appraiser through a lender; the day after, when that lender used an AMC, the fee to that same appraiser for the same kind of order was $250. Explain how that was due to Technnoboy.

There's not a single observation among those specifics that you can dispute. Direct engagement pays more than 3rd party engagement regardless of what form that takes. Staff appraisers (commerce and govt alike) get paid less, fee shop appraisers get paid less, AMC appraisers get paid less.

Every time someone complains about fees from any client type being low because other appraisers are willing to work for less they are acknowledging the effect of peer competition. Even you have complained about the effects of competition-by-fee among appraisers. Me too.

 

[George Hatch]

My comment about the tech was about its effect on the appraisal business. When I went solo it was at the expense of the fee shop operators who had previously dominated that market because they had established those relationships and had accrued the additional physical and business assets it took to operate a multi-appraiser operation. Technology enabled me to beat them at their own game; I literally couldn't have done it without those tech advances. My advantage came at their expense; out of their pockets.

It wasn't just the tech that enabled the AMCs to offer more geographic coverage or more efficiently shop for fees, the govt's prohibition of MB-appraisals also obviously contributed to the lenders' decisions. But if the HVCC had happened in 1998 instead of 2008 the outcome would have been completely different. They wouldn't have been ABLE to operate in the same way or offer the same coverage.

 

[djd09]

yeah the conspiracy of all conspiracies...the private AMC email forum on how to price fix...and dont worry about the regulators or professional orgs...revaa will take care of them

 

[J Grant]

There's not a single observation among those specifics that you can dispute. Direct engagement pays more than 3rd party engagement regardless of what form that takes. Staff appraisers (commerce and govt alike) get paid less, fee shop appraisers get paid less, AMC appraisers get paid less.

Every time someone complains about fees from any client type being low because other appraisers are willing to work for less they are acknowledging the effect of peer competition. Even you have complained about the effects of competition-by-fee among appraisers. Me too.

I have to conclude at this point that you are deliberately ignoring the reality that the HUD fee split allows free-of-cost service that the AMCs offer, giving them an enormous market share and thus leverage over fees.

Staff appraisers or govt workers or people who choose to work for a fee shop might be paid less, so what? The conversation is not about that, though you keep diverting it to be. Peer competition is not the topic either.

 

[George Hatch]

I never denied the lenders were getting their overhead for free. Not once. That's a strawman of that infamous re-imagination thing you do.

The continued existence of the bundled fee is attributable solely to the lender's choices. Nobody is forcing them to pay you less. Those lenders WANT to pay you less under those engagements. From their perspective paying you less is not a bug; it's a feature. A deliberate choice on their part. Splitting the fee on the disclosures - which I fully support - isn't going to stop them from paying you less, either.

 

[Sid Holderly]

I quote or respond with a quote and extended turn time to most all requests. I do very few AMC, but a common reason to increases fee is, acreage, outbuildings, upload fees or waterfront. I rarely accept what is quoted in the appraisal request. It takes me too long to look up what they actually want appraised to get any of the orders that are blasted to many. I am semi-retired and do no need to live under a fee and turn time shoehorn. I do not work in a city, therefore there is much more, variable & eclectic features that get requested explanation clarifications and supporting data requests. Big City reviewers do not fathom the real world outside of cities. Most of my work does not fall into straight forward analysis. The more diverse the area the less the regression models work without massive change for what rural markets value. There is not enough volume of any one specific house type to make quick reports.

I do less AMC and more local bank and estate work.

 

[J Grant]

I never denied the lenders were getting their overhead for free. Not once. That's a strawman of that infamous re-imagination thing you do.

The continued existence of the bundled fee is attributable solely to the lender's choices. Nobody is forcing them to pay you less. Those lenders WANT to pay you less under those engagements. From their perspective paying you less is not a bug; it's a feature. A deliberate choice on their part. Splitting the fee on the disclosures - which I fully support - isn't going to stop them from paying you less, either.

That lenders get their overhead for free is the cux of the problem. They do not get the AMC management service for "free"- it is subsidized by the HUD fee split going to the third-party AMC. Nothing starwman about it. What is a re-imagination thing about it?

Lenders are not paying the appraiser less. (when they use an AMC ) The lender passes the borrower-paid appraisal fee on to the AMC, and the AMC then pushes for the best split they can . It is more accurate to say that the lenders are aware that the appraiser gets paid less under this system, but since it relieves them of cost and some liability with managing a fee panel, they are okay with it.'

When that same lender orders without an AMC, they do not push to get lower fees on regular orders. They simply pay the borrower the covered appraisal fee to the appraiser rather than to a middleman taking a cut. Some lenders and wholesalers use their own panel because the better quality control is worth it.

I agree that disclosing a split fee does not solve the problem - I have stated that numerous times here. The appraisers who believe that are naive. At best it might prevent a few of the most egregious fee splits - if that.

 

[djd09]

14 dollar appraisals...

 

[glenn walker]

This BS of blaming tech has been disproven numerous times.

The day before, the HVCC fees were $500 to an appraiser through a lender; the day after, when that lender used an AMC, the fee to that same appraiser for the same kind of order was $250. Explain how that was due to Technnoboy.

Technology has a wood chipper effect on all business which is a positive for some and a real big negative for others.

The ones hit the most negatively are the one person shop keepers as most older ones are maxed out by their physical body's 8 hours a day or less of labor. That appraiser has now reached his maximum income production and trapped in a corner because he can no longer produce enough volume of reports needed at market fee's that support himself or his operations overhead.