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AMC asking for UAD 3.6 fees, what's everyone thinking?

Overimprovement said:
You of all people are defending AMC's? You don't really think their inquiry is sincere and meant to benefit indies do you??
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?I am not defending AMC's. I am saying that appraisers who are asked this from an AMC will only hurt themselves by not naming a fee increase now, their best and perhaps only chance to get it.
 
Terrel L. Shields said:
If fees increase significantly then they will all double down with more hybrids and waivers. Less work to go around. Why does anyone buy into the notion that doing hybrids and other less than 100% appraisals will increase the volume of work available. There isn't going to be any more work just because they claim you can save time. There is a fixed number of mortgages at any given time.
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They will do what they are going to do wrt hybrids and waivers regardless of any fee increases from appraisers. And given the timidity of appraisers, any fee increase will not be significant. But any fee increase is welcome - appraisers need to get paid decently for the diminishing pool of work that remains.
 
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I'm going to be thrown under the bus..but here goes.

1. Know your market. Gross oversupply or undersupply of appraisers. If you are in a rural area with fewer appraisers you will have a better chance. Urban/suburban areas, be careful you may price yourself out of the market.

2. After you know the above, who are your clients? Large AMCs or direct clients? Do they bid on most orders, set the fees or pay based on your fees?

If your clients are AMCs, like it or not, currently they are in control.

3. Understand the current mortgage market. Mortgage demand is at current historical levels. If you are slow now, you will be even slower if you price yourself out of the market.

4. Understand that waivers accounts for around +-20%. This doesn't include hybrids. The demand for appraisals are at historical lows. Realize we are interim.

5. BREATH. Most companies initially absorbs the cost of new products. Do the new uad for 3-4 months. You should be use to it by then. After that, you should have a feeling for how long the new form will actually take. THEN adjust you price.

Don't give your clients a freak out price and then in four months you realize its not that bad after all.

6. Take all of the above into consideration. Urban/suburban appraiser with a over supply of appraisers, the low demand for mortgages and if you mostly work for AMCs....be careful, you will easily price yourself out of the market. The same low balling appraisers are not going anywhere and will continue to low ball orders.

7. Truth in lending. This maybe the biggest obstacle in our way. This is probably why you are receiving all of these fee requests. The lender will be ultimately setting the new UAD 3.6 fee.



It's not a one sized fits all.
 
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Terrel L. Shields said:
If fees increase significantly then they will all double down with more hybrids and waivers. Less work to go around. Why does anyone buy into the notion that doing hybrids and other less than 100% appraisals will increase the volume of work available. There isn't going to be any more work just because they claim you can save time. There is a fixed number of mortgages at any given time.
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Someone has to ask you the obvious, Terrel ( 'cause ... its borderline annoying to be frank ... :cautious: ) - why do you keep changing your avatar? Why can't you be normal like me & Glenn, for example? :ROFLMAO:
 
NC Appraising said:
If you are in a rural area with fewer appraisers you will have a better chance.
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To a degree but the AMCs seem oblivious to the difference between Rural and Suburban. They don't want to pay more. I was told years ago that because they often bid a flat rate, they try harder to get someone to do a rural property on the cheap. And a bank ordering person with a vendor list but uses AMCs on some assignments that their staff doesn't want to do, said that the AMCs delay getting the report in on time because they spend days trying to get someone to do it below their cost.
NC Appraising said:
who are your clients?
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My bank clients never ask me the fee up front unless a large commercial one and they want to know only for putting it on their good faith estimate to the borrower. They've never turned me down for anything except they will use someone else if time is an issue and I am way behind or on vacation. I really have no interaction with AMCs except thru a couple of appraisers who work directly for a bank and are part of the ordering group aka "Credit Department". They do some in house appraising as evaluations but mostly review work of their vendor's list.

I shocked an attorney the other day by charging pro bono on a mineral estate. I have a problem charging a big fee on property that was valued for only $1,000. I mean it would take 4 or 5 years of income from these small interests to pay for the appraisal.
 
Terrel L. Shields said:
If fees increase significantly then they will all double down with more hybrids and waivers. Less work to go around. Why does anyone buy into the notion that doing hybrids and other less than 100% appraisals will increase the volume of work available. There isn't going to be any more work just because they claim you can save time. There is a fixed number of mortgages at any given time.
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I don't think that they (AMC's, lenders and F&F) will react to higher fees with more hybrids and waivers. I believe they will increase waiver and hybrid volume regardless of what our fees are.

Right now, the AMC's are likely feeling out what we think will be our fees so they can compile their survey of fees. I believe the AMC's and lenders will cut the survey average severely and claim that is the C&R rate. They can see our fees and discuss amongst themselves, but we can't discuss fees.

Other businesses can "discuss" fees openly:

1. Gas stations prominently display their price for gasoline (I am pretty sure their competitors can read their signs).
2. McDonalds and Burger King display their costs on their menus.
3. Real Estate agents, in their mini-monopolies, charge essentially the same commission rate to sell homes (that's not a secret).

I guess the principal operators of the businesses in the above examples may not "discuss" their fees, but they certainly display them. Maybe that's what we can do; display our fees for the public (that would include us) so we can all take a sounding on each other. We certainly would not be "discussing" our fees, rather we would just have them on display.

Sorry again (to everyone and specifically Terrel). I had sugary cereal and orange juice this morning and now I'm chatty and I went off topic a bit on this reply. It's ok, I am gonna work off the cereal by walking my dog for 15 minutes.
 
I wonder what percentage of the lenders outside the GSE pipelines are going to convert from the legacy forms to this UAD setup? THEY won't be getting enough of the data on the comparables to drive the bigger/better AVMs so the additional info on each property will be useless to them. Meanwhile, the legacy forms are still a concise format that's easy to read.

I can well imagine a 2-tier market for appraisal services. I can also imagine some crossover requests. Ordered as a General Purpose form but convert to the GSE UAD and vice versa. For an additional fee, of course.

The smart play for doing an assignment on the legacy forms might be to complete the inspection on a UAD basis on spec, in case the order later converts to a UAD report. I dunno if they're doing it, but if I were an appraisalware vendor I'd consider adding in the capability of loading the relevant UAD info into the legacy forms so their program could operate bisexually.
 
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I am excluding the outliers. Local banks, farm credit, etc.

I'm speaking for mostly GSE mortgage appraisals.

Truth in lending. You cannot compare agents, gas stations, etc. To us. They do not have truth in lending to deal with.

For the most part we are trapped because of this.

My best direct client pays $715 for a typical appraisal. They set the fee. Why? Truth in lending. Per the lender, they pay a higher fee upfront to avoid appraisers from requesting a higher fee.

Bid requests. AMCs searching for the so called lowest fee. Are they really searching for the lowest fee? Yes and no. The lender has a set price for an appraisal with the AMC for a given county or area of the state. So when they cannot find an appraiser they bid, bid and bid until they find an appraiser to do it at the lenders max fee amount.

Could it be a combo of both? Truth in lending and the hassle of avoiding fee increases from thousands of appraisers? I guess. I remember some lenders and AMCs complaining in 2021 that they were covering the additional appraisal costs from appraisers demanding higher fees for complex properties.

I could be wrong. I'm just a outsider looking in.






Clear capital fees
 
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