AMC Fee Splitting Ratio

[DWiley]

Why does the term fee split bother you now, DW?

It’s been common verbiage long before you entered the business

It does not bother me at all when it actually applies to the situation. .

 

[ucbruin]

What part of "I don't know" did you not understand. I have never researched lender policies on borrower fees, because they are irrelevant to me and my business. I charge the lender. Lender pays. What the lender does outside of that is none of my concern.

Appraisers should set fees and collect them, and quit worrying so much about the fees of others. If you get the appraisal fee that you cited on a transaction, what business of it of yours how much I make? Frankly, if a borrower is upset about lenders passing fees along, then they need to talk to the lender, not to me (or you).

Does your company tell potential/existing clients what its fees are....
Or negotiate fees....

 

[J Grant]

If a direct lender does retain any of borrower paid to cover reviews or admin, it is usually a smaller amount, and they still pay a C and R/ do not cheap bid/or cheap fee shop the way AMC;s do. ( exception being when the lender runs its ordering department as a captive AMC for their own work )

Re to clarify with Danny, it is not about the AMC splitting the appraisers' fee, it is about the lender "splitting" the borrower fee to cover both the AMC paid portion and the appraiser portion of the service.

 

[norapp]

I am working with a new AMC where the fee paid to them is in the order. I like that.

 

[J Grant]

It does not bother me at all when it actually applies to the situation. .

We get it, the AMC does not split the appraiser fee of $300 into $150 for appraiser and $150 for AMC. None of us ever said or implied that. . .

The split is when a borrower pays $500 to lender for appraisal, lender sends AMC $500, and the AMC "splits" the $500 into $200 for AMC and $300 going to the appraiser. .

Does anybody member years ago, the closing/HUD statement had verbiage ( since removed ) in the bundled fee that the fee $ for the secondary service (management ) be in proportion to that contribution vs the fee for primary service (primary service is the appraisal)

It would be tough for an AMC to argue their contribution for their portion of $200 for what typically might be a hour of work, much of it automated or low paid staff , is proportionate to the appraiser $300 for 6-8 hours (or more ) of professional labor. It is estimate of $200 an hour for AMC service and $50 or less an hour for Appraiser service. Usury? Meets my definition lol.
Has anyone here kept a copy of the HUD /closing statement from years back ? I can't recall when the verbiage was dropped re primary vs secondary contributing service

 

[ramrcdk]

I will disclose mine. We pay the appraiser 100% of the fee that the appraiser stated to us. I looked at one this morning where the appraiser billed us $4,500 for a very complex deal in a rural area (and, he did a great job on it by the way). He will get $4,500. Now, what we bill the lender for our services, well, that is none of his concern

YOU are : few and too far between ! A WINNER! and I appreciate your post !! That is refreshing!

AMC Fee Split ( "Split" is a play on words )
Here is a true example: Order Assignment Acceptance is as follows : Lender : (borrower paid lender) $600 - $625
Appraiser Fee : $325 (take it or leave it)
Equals the AMC Fee of $275.
Order Date: today & you have 4 hours to accept prior re=assignment. Due Date : 5 days, same time. (whether or not it is on a Sunday morning, kids birthday, or Holiday, or ???.)
If you can not meet the Fee or Turn Time please decline the order with the reason for the decline.
Now, ask but I won't say WHOM because ...there are spys among us that report directly to the Chief.

Though I have seen many offers of $225 - 250 - 275 and bidding wars, I do not accept them either.
Sure there are many, many other examples.

Edit: Oh and I have a list of all the appraisers in per 2 state area, whether or not they are "competitive", "new", ... and their typical fee. Guess it was an "attachment error".

 

[DWiley]

We get it, the AMC does not split the appraiser fee of $300 into $150 for appraiser and $150 for AMC. None of us ever said or implied that. . .

The split is when a borrower pays $500 to lender for appraisal, lender sends AMC $500, and the AMC "splits" the $500 into $200 for AMC and $300 going to the appraiser. .

Does anybody member years ago, the closing/HUD statement had verbiage ( since removed ) in the bundled fee that the fee $ for the secondary service (management ) be in proportion to that contribution vs the fee for primary service (primary service is the appraisal)

It would be tough for an AMC to argue their contribution for their portion of $200 for what typically might be a hour of work, much of it automated or low paid staff , is proportionate to the appraiser $300 for 6-8 hours (or more ) of professional labor. It is estimate of $200 an hour for AMC service and $50 or less an hour for Appraiser service. Usury? Meets my definition lol.
Has anyone here kept a copy of the HUD /closing statement from years back ? I can't recall when the verbiage was dropped re primary vs secondary contributing service

An hour of work. You crack me up. If you ever get to PGH let me know and I will show you what happens first hand, and the millions of dollars it takes to do it.

 

[NachoPerito]

The answer to the original question is: it varies. The only study I can find is from 2012 in Texas. They found that Appraiser fees averaged $300 to $425 and AMCs averaged $300 to $400. Based on that the average fee split is almost 50/50. Today I believe the appraiser is getting a higher split, but I can't be sure.

 

[J Grant]

An hour of work. You crack me up. If you ever get to PGH let me know and I will show you what happens first hand, and the millions of dollars it takes to do it.

Okay, i will happily say the hour was an estimate and could be off- what does the average, (not a problem child order ) but average order process and review take typically from AMC time ? I can easily imagine it costs millions to operate a large scale AMC (including the CEO million dollar salary bonus lol)..However the AMC can do that via economy of scale volume and by offering other services besides appraisals.

I don't begrudge the AMC making a profit, I object to the way it is made (via borrower fee split by lender to cover AMC service and the appraisal , result incentive to get low fee appraisals from AMC's

Both the AMC and lender exploit this on the backs of appraisers , I am not just blaming the AMC's.

 

[CANative]

Lol you report the rare very high $ exception. Which is not applicalbe to the vast majority of ordinary lender fee work.

Yes, we get it, attorneys advised AMC reps to say they pay the appraiser 100% of the fee the appraiser states to them. Very clever way to evade C and R or usury fee split charges/other.

It does not answer the the OP's question, re, when borrower pays $500 (for example) what percent does the AMC get/keep/split. As an example, from borrower paid to lender $500, lender sends AMC $500 (or AMC bills lender $500) end AMC keeps $200 and pays appraiser $300,

Yes, the AMC is paying the appraiser 100% of the appraiser's "stated fee " for the order of $300, but the borrower paid $500 is still split between the AMC and appraiser.

It's part of the bundled fee provision, my question is why are AMC;s loathe to use the term split fees these days,

I get every cent I quote. What they charge the lender is none of my concern. This thread is probably inappropriate for ethical appraisers.