Alamode/Mercury Fee report

[Frederick]

I appreciate that Mr Biggers and Alamode has gone to the trouble of assembling and distributing this data. He has always shown himself and his company to not only being on the cutting edge but fair and honest. I am a former ACI customer and for many years now, an Alamode customer. The contrast between the firms is like cold rainy day and a warm sunny morning.

 

[Mike Kennedy]

" The transactions between clients and tens of thousands of appraisers using Mercury Network’s technology backbone form the basis of the AFR data. The AFR excludes reports ordered by known appraisal management companies, or AMCs, in order to determine the customary fees paid to independent fee appraisers when they are engaged directly, without middlemen.
AFR transactions cover the preceding twelve months, up to the end of the month immediately prior to publication. It is actual observed data, not an industry survey of perceived fees. Each transaction is extensively validated and verified before inclusion."

http://appraisersforum.com/showthread.php?t=165840

 

[dbiggers]

I may be wrong, but I don't think Alamode has sufficient data in most, if not all areas, to adequately determine what is customary. There may be many appraisers signed up with Mercury, posting what they think they are worth, but how small a fraction, of all the work, actually goes through Mercury?

Mercury has our podunk style county @ $325, which is beyond low. Our fees are currently, and have always been higher than the mass populated areas of Phoenix and Tuscon, which Mercury has at $350.

I really like Alamode, I live by their software. I will not bash them. I say take their data at this point, with a grain of salt.

To give you some idea of the volume we handle, I saw a stat last week that in the last 12 months, our map servers (used in WinTOTAL, XSites, etc.) provided 196 million maps to our clients (not all appraisers, but you get the point). Mercury Network has handled over 11 million transactions and is growing rapidly since its rebranding as an HVCC compliant system for lenders. Even after removing all AMC orders, all non-URAR orders, all orders with any odd characteristics, all orders with extra requirements (more forms, etc.), and so on, we still had hundreds of thousands of clean, URAR-only orders spanning the last 12 months. Trust me, there's a lot of data.

The AFR specifically states that it's not an FHA-only report, nor does it attempt to calculate what extra fees are often added on to a URAR. Once you start doing that, the numbers would indeed become VERY unreliable. You'd be comparing apples to oranges. In order to have a baseline, you have to start with the easiest to identify, "cleanest" piece of data that can be analyzed, and I think we can all agree that that is naturally a plain Jane basic URAR. Right?

Also, as for small towns, realize that what appraisers may say their fees are when asked by another appraiser, and what they actually charge, may be two different things.

Note also that the report FAQ specifically notes the value of standard deviations; MOST (roughly 2/3rds) of all fees will be within one standard deviation plus or minus of the average fee. Nationally, that means that with an average of $351 and a standard deviation of $91, about 60% of fees will range from $260 to $442. Therefore, as we've said, "customary" and "reasonable" are two different things -- the median of $350 may be customary, but the range can be wide depending on circumstances. We've claimed no more than that.

Ultimately, the facts are what the facts are. We don't make them up. This report can be used to an appraiser's advantage in business planning and fee negotiation, or an appraiser can throw it away and work in the dark. People do both things with valuable data all the time in all sorts of industries, largely because I believe some people approach things analytically and others emotionally. There's nothing wrong with either approach, but I suspect a healthy mix of the two is valuable ("I see the data but it makes me mad -- so what do I do about it? Shoot the messenger or raise my fees?").

I sure hope you use the AFR and profit from it, but if you don't, then I'll refund what I charged you for it. Oh wait... that's right, it's free. (Just trying to inject a little humor in an otherwise stressful topic.)

Dave Biggers
Chairman
a la mode, inc.

 

[Tim Hicks (Texas)]

Gentleman, it is a good starting point to combat AMC fee offers. Believe me, they will not be offering anywhere near the customary and reasonable fees in this survey. This survey gives you data to support for a minimum fee to be paid by these companies. I wish the same could be done for conventional loan appraisals, but that ship sailed long before the HVCC.

 

[Karl]

Most of you wouldn't even be on this Forum IF Dave had not been so much help when this Forum first started. The problem is NOT Dave and or his Data.

The problem is many Appraisers were charging less than they claimed to have been even back during the False "BOOM". What Appraiser's lied?? Afraid so, think of the "DEALS" many made for the "exclusive" work some were promised.

How many Appraiser's on here that REFUSED to work for AMC's have taken a AMC assignment "Cause it was "In the neighborhood"??? OR it was a "Cookie Cutter". Or the newest one "took it so a RE Agent would have one less BPO"

 

[Ray Miller]

Also, as for small towns, realize that what appraisers may say their fees are when asked by another appraiser, and what they actually charge, may be two different things.

Note also that the report FAQ specifically notes the value of standard deviations; MOST (roughly 2/3rds) of all fees will be within one standard deviation plus or minus of the average fee. Nationally, that means that with an average of $351 and a standard deviation of $91, about 60% of fees will range from $260 to $442. Therefore, as we've said, "customary" and "reasonable" are two different things -- the median of $350 may be customary, but the range can be wide depending on circumstances. We've claimed no more than that.


I sure hope you use the AFR and profit from it, but if you don't, then I'll refund what I charged you for it. Oh wait... that's right, it's free. (Just trying to inject a little humor in an otherwise stressful topic.)

Dave Biggers
Chairman
a la mode, inc.

I agree with Dave on the above statements.

The problem I find on quoting fees is my base fee which I have to enter may be $350 for a given county but fees could run up higher. So for the most part I think many take that to be my fee for that area.

There is no way to enter a fee range for an area in Alamode networks or any of the AMCs. There is also no way to enter for complexity of the report 2 ac lot with no outbuildings to a 80 ac with a number of different types of outbuildings or a subject on Castle Rock Lake to a subject on Mud Lake. So where my base fee for a simple 1004 may be $350 the range can run up to or should run up to $900 for a 1004.

The same can be said for land appraisals. Most think of a land appraisal as a vacant lot or two. Where in my case a land appraisal may be several hundred acres with a lot of different conditions for the land that need to be check and taken into consideration..

Yet when someone is looking to hire an appraiser they are looking at the base fee each is saying they charge and in many cases making a selection on just that. Not fully understanding the difference in time and research it may really take to complete an appraisal.

I also think the numbers may be a bit skewed because, appraisers in Madison where the it appears the fee is $300 or Milwaukee where the fee is $325 will charge $350 to come to the area that I cover. They are happy to get that extra $50 and will work for that because it appears they will be making more money. I feel they really don’t have a handle on the cost of doing business in the rural area, nor in many cases do I think they do all the necessary research that is needed on rural or resort property. Thus there fee’s are lower, and then that is forcing me to list a lower fee then I would normally charge, just to get considered for an order.

When my account tells me I should be charging a minimum of $475 for simple 1004 appraisals to be showing a fair profit. Going to $900 for those 1004 that are a bit more complex with water front, acreages, outbuildings, resort locations etc. The same is said for land appraisals with acreage, waterfront, outbuildings, different types of soil, woods, rock out cropings, old buildings etc.

The alamode report gives us a base and it good information to know and have at hand. But it is not the all in one answer to fees and what we should be charging.

I just had my chimney sweep out this morning. It took him all of 20 minutes to clean the flew and stove. The total cost was $209.00. He had drive time of 30 minutes from his shop. He was on a route that he would do 10 stops in 8 hours. That is $2000.00+ for the 8 hour day. The same can be said for any service person that I do business with that comes to my home/property, LP gas company $100 delivery charge, vet $100 trip charge, tow person $150 hook fee and $1.50 a mile, compared to what I get for doing a 1004 with all the drive time and research time, cost of doing business, the risk of being sued, I am working at below minimum wage and not meeting the cost of business, the return on investment or the return of my investment at $350 to $450 a 1004 report.

Dave it’s a start and I thank you for the time and effort.

 

[Mile High Trout]

follow up

There are two threads on this matter.

The wording here is that only non-AMC orders are utilized to determine customary rates. (posted with permission) Good 1 AlaMode.

 

[jimmyfrank]

Jimmy - Oregon has new business taxes and the registration fees refer to the AMC registration fees. So far I have California and waiting for Oregon and Washington to go through. I also have to pay Washington sales tax and I'm not sure yet about California I'm still trying to figure it all out.

IF I chose to have national coverage it would cost me anywhere from $150,000 to $250,000 a year to register...that's just registration fees.

Man, that's not chump change, is it. I appreciate you explaining it to me. Jimmy

 

[dbiggers]

The problem I find on quoting fees is my base fee which I have to enter may be $350 for a given county but fees could run up higher. So for the most part I think many take that to be my fee for that area.

So where my base fee for a simple 1004 may be $350 the range can run up to or should run up to $900 for a 1004.

Ray, I couldn't agree more. I used to appraise in rural and semi-rural areas of Oklahoma, where you had lenders think a 1500 sf tract house in a 1960's cookie cutter subdivision should be the same fee as a 1500 sf ranch on a... well, a **ranch**.

In this analysis, we took whatever the appraiser entered as the final fee, not what their fee schedule indicated for that "typical" house. So, while they may have had a fee schedule with $350 for a base URAR, if they charged $900 on a transaction because it was on a lake and such, the only thing we analyzed was the $900.

Many fees ran from well into the thousands, for what was listed as a basic URAR. I personally spot checked a large sample of the high end fees by using Google street view and Microsoft Birdseye view, just to be sure that we weren't talking about anomalies. And indeed, there were large homes on standard lots in gated neighborhoods in Maui and Napa and upstate NY and so on getting thousands for a URAR. They were legit.

We did eliminate cases where appraisers entered their own home addresses into a dummy lender account and gave themselves a million dollar fee. We're not stupid. We know where you live, and we know what you make. ;-)

Dave Biggers
Chairman
a la mode, inc.

 

[Richard J. Glesser]

I reviewed the fees based upon my typical fees for my service counties and found them to be slightly lower overall. However, I applaud a la mode and the service they provided to appraisers in compiling this data because, while these fees are slightly lower, those quoted by AMCs are criminally lower. For the first time, appraisers have data with which to fight the low AMC fees. Based upon the FHA mandate that local appraisers be paid typical local fees, I would suggest any AMC solicitation for FHA appraisals at low fees be reported to both HUD and the lender. I'm quite confident that many AMC execs are lying awake this weekend trying to devise methods of discrediting this report which I believe blindsided them - finally!