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Appraisal Management Companies

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Ghost Rider

Senior Member
Joined
Apr 27, 2003
Professional Status
Banking/Mortgage Industry
State
Connecticut
Just curious to see the basic opinion of them on this board. From my experience, they can be very good clients, or as bad as the worst of the "make a deal" mortgage companies.

Most of the other appraisers I speak to in the my area don't like them. They are upset by the lower fees and the need for a relatively quick turn time. While I agree, at a time as busy as it has been, the turn time can be a major issue, but they way I look at it is this.

I'd rather be paid a lower fee to do 12-18 appraisals a week (which from a lot of the bigger AMCs is not a stretch) at a slightly lower fee, than to be doing 5-10 at full fee. Also, the AMCs I have dealt with pay me a HELL of a lot quicker than the mortgage companies in my area. Typically, I get a check in the mail 7-10 business days after I send in the appraisal, and with the mortgage companies I get the "well, we haven't closed that yet, we'll get the check out as soon as we can" line.

Plus, we all know that the gravy train of the refi boom will end eventually. The AMCs can pull from a lot more places to get work than those mom and pop mortgage companies that poppud up 5 years ago to capitilize on the way the market has been lately.

Just my $.02......would love to hear what you all think.
 

vargasteve

Junior Member
Joined
Jan 21, 2002
Professional Status
Certified Residential Appraiser
State
California
Nothing wrong with AMC, however REMEMBER - you reap what you sow. If your doing 5 - 10 a week full fee, then all your effort & the success that follows is lower fee.

If your spending you time doing 10 - 18 for a AMC a a lower fee you'll be making more money in the short time. However, your (along with others like you) lowering overall fee's in your area, along with putting your effort into those type of clients (which often are generally lower quality assignments) requiring more effort & time.

YOU REAP WHAT YOU SOW!

Let me give you an example. A un-professional mortgage broker can take some B or C paper client with a home that needs to be overvalued to make the deal work. He's got to put together a Bull Crap application with mis-representation together first. Make copious calls to appraisers trying to get a value guarantee from a number hitter (who has no boundries or ethics ). Then he/she has to go through various lender hoops trying to put them together trying to prove the appraisal or the application is for 'real'. This all takes twice the effort. Or he/she 'turn professional' and can seek 'A' paper and do a Michael Jordan 3 pointer on the easy one's. Its a choice. (oh by the way the appraiser will take 25% to 100% more time putting the appraisal together for the same fee as a true value would take if its to look like a professional document)

You can cater to these people & they'll send you business or you can SEEK quality work.

Whether, AMC's or pushy Mortgage brokers & thier clients or whatever. I've really learned in this business "if you want to make money & enjoy your work - plant the seeds that will bring you quality assignments at full fee".
 

vargasteve

Junior Member
Joined
Jan 21, 2002
Professional Status
Certified Residential Appraiser
State
California
I mean of course full fee in the first sentence.
 

Mike Simpson

Senior Member
Joined
Jan 30, 2002
I'm going the other way...fewer appraisals, much higher fees.

Different clientele--much more professional, never argue (they've a need to know fair market value, and they trust me to give it to them), less competition and prompt pay. There are many different avenues open to an appraiser other than mortgage loan appraising. You've got to dig to find them, but the rewards are well worth it (I've posted on this subject before). Seek and ye shall find.

-Mike
 

Ghost Rider

Senior Member
Joined
Apr 27, 2003
Professional Status
Banking/Mortgage Industry
State
Connecticut
Its funny, but I get less arguments over value from AMCs than I do from "traditional" lenders. Maybe it's because with an AMC, I never need to have a conversation with a loan officer, since they aren't the ones who retain me. One of the AMCs I do a LOT of work for has a branch who does a lot of B and C grade refis, second mortgages, and equity lines. I've roasted the value on a few of their deals, and always make it a habit to call the contact at the AMC BEFORE I sent it in, just as a courtesy. Never has there been a problem with them, and they all have told me the same time "We don't pay you to appraise the house for what the borrower thinks it's worth, but to appraise it for what it is worth". Needless to say, I almost dropped my phone the first time I heard that, but it was a really good feeling to say the least.
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
I'm with Mike Simpson on this issue. (what a surprise, huh Mike?)

For simplicity, I'll use 5 orders per week.

A ) 5 orders at full fees X $300 = $1,500 \ 40+/- hours working.

B ) 5 orders at AMC fees x $225 = $1,125 \ 40+/- hours working.

Ummmmm..... let me see...... which one would a logical person choose?

It takes the same amount of work to properly complete the appraisals. WHY would anyone do it for less? Besides, it lowers the bar for all appraisers and the AMCs (most owned by the lender) are charging a whole lot more for your appraisal than the full fee appraisers do. I just don't understand why any appraisers go along with this. I think of appraisers as 'normally' being logical and I just can't find any logic here.

:huh: :confused: :eyecrazy:
 

wyecoyote

Senior Member
Joined
Jan 15, 2002
Professional Status
Gvmt Agency, FNMA, HUD, VA etc.
State
Washington
I gotta agree with Mike and Pamela on this. Full fees.

Here we charge slightly more than pamela.

5 X $400 = $2,000

5 X $225 = $1,125 week

to make up the difference I need to complete 3 more for the AMC. Which can be alot more work and headache.

Don't get me wrong some AMC's are good to work with and we currently have one that pays full fees and no headaches.

Ryan
 

Mike Simpson

Senior Member
Joined
Jan 30, 2002
Believe it or not my fees are higher than those mentioned, of course it's all relative dependent upon where one lives, how many competitors are operating in that geographical area, and the type of assigments being performed.

I tried the AMC thing when I first started my business. However, I tired quickly of dealing with their supporting staff, accepting 25% less my typical fee, and taking all the liability & expense of running a business for the privilege.

After one year I estimated they'd cost me @ least $25,000 in fees, and that was the end of that. I'd rather deal with the client directly anyday than see $25,000 walk out the door in a single year. I've got a retirement to fund, health insurance to pay for, and vacations to plan. NO THANKS!!!

I've a former client who changed employers and now works for one of the nations largest lenders. Some years ago that company started an AMC--a spin off if you will (they got tired of writing checks to appraiser's I guess). Anyway, this former client has practically begged for me to do work for them. I've declined...and replaced the former client.

-Mike
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
Why not quote the AMC full fees?

Then your equation could be:
5 non-AMC clients at $300 each = $1,500
or 5 AMC clients at $300 each=$1,500
or a mixture of 5 orders from anybody at $300 each = $1,500

You the appraiser quotes the fee--if the client agrees to pay the fee, the appraisal is completed. If the client doesn't agree to pay the fee, the order doesn't get placed and then you don't have to fight with anyone about not paying their bill. If you don't like the way the client, whether a lender or an AMC, pays their bills, don't accept the order. If the client, whether a lender or an AMC, pays the fee you quoted in a timely matter--it doesn't matter if it is an AMC or not.
 

Mike Simpson

Senior Member
Joined
Jan 30, 2002
I've never, not once, nada, zilch...had an AMC agree to my fee!

Again, they're trolling for the absolute rock bottom price (in my experience) PERIOD!!!

Why waste my time quoting @ all...they're taking up both our valuable time & I'm working for $'s per minute! I'm after bigger fish.

-Mike
 
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