AMC Allocation of Commercial Jobs?

[Zoe]

There is certainly the element of fastest and cheapest for commercial AMCs, although a fairly high percentage of banks are bidding out on their panel in this manner also. Occasionally, commercial AMCs will assign a direct award (or something close to it), but have heard a time or two that this was after the first appraiser screwed it up.

True.. Appraisal management company and commingling of fees was worst thing to happen to appraisal profession. Appraisal management companies are fine imho.

Commingling of fees on truth in lending disclosures to borrowers, (which was not in original bill) is horrible for appraisal profession from a competency standpoint and public trust.

 

[Zoe]

Don't remind me of being partner with my old girlfriend Ms. Trice. I really never felt like a partner.

 

[Zoe]

Employee? Slave? I can buy that.

Partner? No way. I can't buy that protocol.

 

[George Hatch]

Do "commercial AMC's" have staff appraisers?

In my experience, there is a big difference between a bank bidding out an order to their fee panel, because the bank is looking for a reasonable cost , which is paid by the consumer. For example, if the fee bids range from $4000 to $6000 for an order and the $4000 bid wins, the borrower is charged $4,000, correct?

But an AMC is not just looking for a reasonable cost , they are looking for a super low fee that throws back PROFIT to them. For example, in the above, if the $4000 fee bid won, the borrower might get charged $5000 by the bank and the AMC makes the $1000 spread. However, as you note, there is low activity of AMC's in commercial, because with less volume and more diverse points of order, the AMC can not control the supply and demand enough push fees down low enough to make a profit.

If the AMC controlled a big volume of commercial the way they do residential, in the above example, a $4000 bid would not win - a $2000 bid would win.

The AMCs don't control a significant value of the commercial work. The national appraisal firms control a lot more of the work, but then again their appraisers are working for percentage splits, too. The direct lenders at the community and regional levels are price sensitive and I routinely get shopped by fee. Just this morning I put in a bid on a commercial property. This time I won that bid but I don't always win.

 

[glenn walker]

Do "commercial AMC's" have staff appraisers?

In my experience, there is a big difference between a bank bidding out an order to their fee panel, because the bank is looking for a reasonable cost , which is paid by the consumer. For example, if the fee bids range from $4000 to $6000 for an order and the $4000 bid wins, the borrower is charged $4,000, correct?

But an AMC is not just looking for a reasonable cost , they are looking for a super low fee that throws back PROFIT to them. For example, in the above, if the $4000 fee bid won, the borrower might get charged $5000 by the bank and the AMC makes the $1000 spread. However, as you note, there is low activity of AMC's in commercial, because with less volume and more diverse points of order, the AMC can not control the supply and demand enough push fees down low enough to make a profit.

If the AMC controlled a big volume of commercial the way they do residential, in the above example, a $4000 bid would not win - a $2000 bid would win.

6 unit's are no harder than 4 but States consider 5 up as Income and require GG. Over 30% of our fee panel that did residential also did the 5 to 8 unit buildings but not real commercial but we only paid $150 more on 5 to 6 then a 4 unit. But the days of CG getting big pay on 5 or 6 units ended years ago.

 

[Gobears81]

Do "commercial AMC's" have staff appraisers?

In my experience, there is a big difference between a bank bidding out an order to their fee panel, because the bank is looking for a reasonable cost , which is paid by the consumer. For example, if the fee bids range from $4000 to $6000 for an order and the $4000 bid wins, the borrower is charged $4,000, correct?

But an AMC is not just looking for a reasonable cost , they are looking for a super low fee that throws back PROFIT to them. For example, in the above, if the $4000 fee bid won, the borrower might get charged $5000 by the bank and the AMC makes the $1000 spread. However, as you note, there is low activity of AMC's in commercial, because with less volume and more diverse points of order, the AMC can not control the supply and demand enough push fees down low enough to make a profit.

If the AMC controlled a big volume of commercial the way they do residential, in the above example, a $4000 bid would not win - a $2000 bid would win.

There are staff review appraisers for commercial AMCs, and most of them are at least willing to pick up the phone and discuss if they find potential issues with the report. I haven't been left with negative opinions of most of the reviewers.

I don't know enough about the AMC bidding side to fully answer your question. A little resistant to embrace that business - hard enough to accommodate the turnaround time expectations for my direct banking clients, so not really interested in competing with someone from 100-miles away.

 

[J Grant]

The AMCs don't control a significant value of the commercial work. The national appraisal firms control a lot more of the work, but then again their appraisers are working for percentage splits, too. The direct lenders at the community and regional levels are price sensitive and I routinely get shopped by fee. Just this morning I put in a bid on a commercial property. This time I won that bid but I don't always win.

I am aware that the AMCs d0o not control a significant amount of commerical work- k, as explaind in my post, they have a different motive in obitaaing fee bids thaen a direct lender /bank - who bids to get a lower or reasonable fee cost, vs an AMC having the leverage of volume to push fees way below cost to obtain a split of the profit. Which illustrates why AMC's are not used in larg4e number on the commercial side, and when they are used, I suspect they have less leverage on fees.

 

[George Hatch]

Completely wrong. They don't have as much leverage with the CGs. They never have.

I say this having worked this end of the market since before the inception of licensing. I work with these clients. You don't.

You guys are on here every single week citing examples of AMCs exploiting their leverage in the market. We never see the CGs complain about the AMCs. What the CGs complain about are the lenders who are shopping fees (due to the online marketplace) because that's who they are doing business with. I lose assignments due to my quoted fee on a regular basis. That factor has been constant all along.

I have never once heard of CGs working for less even when they are working for an AMC. It appears the AMCs actually do run a cost-plus program because they always shop by fee first before committing to a bundled fee to their client.

 

[J Grant]

Completely wrong. They don't have as much leverage with the CGs. They never have.

I say this having worked this end of the market since before the inception of licensing. I work with these clients. You don't.

If you are responding to me, you misunderstood my posts. I said the same thing ( in two posts ) - that the AMC's do not as much leverage with the CG's.

I was giving an example of what they look for in fees- and why the fact that the AMCs have such tremendous leverage on the residential side empowers them to push fees down.

 

[George Hatch]

And the reason they have that leverage in the market is because......