AMC Allocation of Commercial Jobs?

[J Grant]

Wouldn't it be great if every business had to report fee splits? AMC's have to do a lot more fee reporting than say gas stations, grocery stores, clothing stores, doctors, even independent appraisers themselves.. just saying.

It is not the same thing at all!!
A business paying employees a salary is not fee splitting. It is an employer paying a salary. Paying a salary or paying independent contractors has to be reported to the IRS.

Not understanding what we are up against wrt AMCsx is part of the problem, imo. It is not just a fee split; it is that by getting compensated by the split, the AMC does not charge its lender customer a cost charge. What other business has that amazing market share advantage? (courtesy of our govt on the HUD )

Two bakeries are selling cakes. One offers it for free, the other charges its customers. Which bakery will get the lion's share of the market?

 

[George Hatch]

I am not complaining about the markups of appraisal shops. They hardly exist anymore on the res side anyway. On the commercial side, an individual appraiser can compete against them, or join them. Do commercial shops control the mass of volume in commercial work?

I am complaining about how the bundled fee allows the AMC a huge market share on the res side by offering free-of-cost service to their lender customers ( thus giving them leverage over fees ).

The appraisal fee shops you reference charge a cost to their lender customer for an appraisal . Thus, an individual appraiser could compete well against them, both charge a fee to their customer to provide an appraisal. The AMC, due to the bundled fee, government perk, gets to offer free-of-cost service.

I don't disagree with any of that. But none of that alters the point that the business model they're using is just a business model.

If they wanted to get uppity about it, the AMCs could argue their conduct has been more equitable than how a lot of the "fee shops" that operated off the backs of desperate trainees were conducting themselves. They doubled the number of appraisers in 5 years in my state, so that conduct wasn't just limited to a handful of "supervisors".


So the "predation" behavior in the appraisal business has in no way been limited or even exemplified by the AMCs. Some of the fee appraisers (arguably) have done even worse in their day, even if they can't figure out how to do it to the same extent today. Even if their victims were in the more vulnerable position with even fewer alternatives than the current AMC setup presents.

And no, I'm not singling the fee appraisers out when I comment on how some of them abused trainees for profit and gain. I'm just declining to ignore that conduct as if they never did it and as if they wouldn't do it again if they could figure out how to make it pay again - they definitely WOULD exploit their trainees if they could. They already proved that.

 

[J Grant]

I don't disagree with any of that. But none of that alters the point that the business model they're using is just a business model.

If they wanted to get uppity about it, the AMCs could argue their conduct has been more equitable than how a lot of the "fee shops" that operated off the backs of desperate trainees were conducting themselves. They doubled the number of appraisers in 5 years in my state, so that conduct wasn't just limited to a handful of "supervisors".


So the "predation" behavior in the appraisal business has in no way been limited or even exemplified by the AMCs. Some of the fee appraisers (arguably) have done even worse in their day, even if they can't figure out how to do it to the same extent today. Even if their victims were in the more vulnerable position with even fewer alternatives than the current AMC setup presents.

And no, I'm not singling the fee appraisers out when I comment on how some of them abused trainees for profit and gain. I'm just declining to ignore that conduct as if they never did it and as if they wouldn't do it again if they could figure out how to make it pay again - they definitely WOULD exploit their trainees if they could. They already proved that.

FWIW, I have nothing against AMC's as a concept. I am against the fee-split HUD perk business model for reasons explained. IF wants to get technical, perhaps it benefits the lenders more than AMCs. Regardless, the combination of the lenders getting free of charge to them and the AMC's able to capture a huge market share because they can offer free of cost service to their lender customers ( subsidized by the appraisers' fee split ) is a combination that results in way lower appraisal fees and way higher concentrated market share leverage.

I can not understand why you want to compare it to appraisal fee shops, which are a different business model. I was trained by an amazing fee shop back in the day, and worked for a brief time with an awful one and short time with an okay one. Some of them abused trainees, others did not. If a certified appraiser chose to work for a fee shop, the better ones or ones who have been there longer often got up to 70% of the fee, got to choose their orders, and fee shops typically offer guidance, shared resources, etc.

 

[George Hatch]

Appraisers working for splits and the mgt taking the other part of the fee - often the majority. Same with staff appraisers whether in commerce or govt. Those are the parallels to which I am referring.

If I'm working via direct engagement then I am a contractor. If I'm working via AMC then I'm a sub-contractor relative to that lender's assignment.

Same thing has been happening in other industries (3rd party mgt). The doctors are REALLY mad about it, and they can't even blame REVAA or the FTC for their problems.

 

[J Grant]

Appraisers working for splits and the mgt taking the other part of the fee - often the majority. Same with staff appraisers whether in commerce or govt. Those are the parallels to which I am referring.

If I'm working via direct engagement then I am a contractor. If I'm working via AMC then I'm a sub-contractor relative to that lender's assignment.

Same thing has been happening in other industries (3rd party mgt). The doctors are REALLY mad about it, and they can't even blame REVAA or the FTC for their problems.

The AMC business model, which offers their AMC management service free of cost to their lender customers, is not the same as a fee shop, which charges its lender customers for an appraisal. You refuse to recognize how that free-of-cost service, courtesy of the bundlee fee split on the HUD gifts, the AMC's an enormous market share, which is what gives it the leverage over fees.

Which has nothing to do with an appraisal-fee shop or any split they arrange with an appraiser. The appraisal fee shop is not a third party. In fact, if they employ over X number of appraisers, they must register as an AMC for lender-regulated work.

A "fee shop" can be an individual appraiser or owner who either hires appraisers or arranges to use them as independent contractors. They are not offering their services as a third party to get a fee split of the total on the HUD.

 

[J Grant]

Appraisers working for splits and the mgt taking the other part of the fee - often the majority. Same with staff appraisers whether in commerce or govt. Those are the parallels to which I am referring.

If I'm working via direct engagement then I am a contractor. If I'm working via AMC then I'm a sub-contractor relative to that lender's assignment.

Same thing has been happening in other industries (3rd party mgt). The doctors are REALLY mad about it, and they can't even blame REVAA or the FTC for their problems.

Doctors write about any third party is about insurance coverage and payouts for procedures, which is not the same thing. The physicians have been able to fight back to a degree - good for them. But their insurance issues are a whole different topic.

 

[George Hatch]

So you never heard of medical mgt companies? Let me help you out on that

 

[J Grant]

I, for one, do not claim any expertise regarding the enormous costs and byzantine complexities of medical insurance or medical management companies. Kind of off topic - at least for me.

 

[JM2187]

I, for one, do not claim any expertise regarding the enormous costs and byzantine complexities of medical insurance or medical management companies. Kind of off topic - at least for me.

AMC's also have considerable licensing, insurance, legal, HR, and IT expenses.

 

[George Hatch]

I, for one, do not claim any expertise regarding the enormous costs and byzantine complexities of medical insurance or medical management companies. Kind of off topic - at least for me.

Me neither. But I can read the summary and see the parallels with what AMCs do. How about you? Can you see the parallels?

Here's another parallel business type. Who do you think should we blame for their existence and their market share? Should we blame them for forcing their clients to do business with them?