Be the Driver, rather than just a passenger of your appraisal practice

[Zoe]

The flip side is if fees were separated between AMC and APPRAISER, it would change the whole market between AMC's and Lenders and Appraisers.

In reality the way it is structured, AMC's should either be employees of APPRAISERS or APPRAISERS should be employees of AMC's.

If Lender paid AMC, directly out of their operating account, it would change the whole landscape. They could still pass the AMC fee on to BORROWER after AMC sent lender a bill. HUD disclosures would have to be redone, but that is nothing.

No way fastest and cheapest is best way to manage the appraisal profession.

 

[DWiley]

No way fastest and cheapest is best way to manage the appraisal profession.

Totally agree. That is why the primary driver of the assignment logic used at the AMC where I worked was report quality. It does no good to "save" $100 if the report is so bad you have to spend $200 getting it revised/corrected.

 

[J Grant]

You said that AVMs only produce a range and that a human picks a point value. Then you edited it.

Oy veh it gets exhausting posting here!

When I write a post, I do not post my entire body of knowledge on a subject! For brevity sake I edit and post only the parts relevant to the point I am trying to make. I believe I did not say AVM's can only produce a range. I very well know an AVM can produce a point value ( which typically gets a confidence score )

I said, for the topic at hand, that a Fannie/Freddie in house internal AVM/other product for a WAIVER produces a value range, and then the human picks a point value - the point value being either a sale contract price or la oan officer estimate - as long as the point value is within the AVM range, it is good for the loan approval.

 

[J Grant]

While quality is a component of AMC selection, if 10 appraisers in an arear produce equivalent level of quality, then the selection is lower fee and/or turntime.

Those same 10 appraisers if assigned the work through a lender direct have to maintain a level of quality and turn time, but they are not expected to lower their fee to get an assignment ( for regular non complex work ). The direct lender typically pays a same fee for non complex appraisals from yearly C and R surveys/VA/other comparisons and appraisers agree to take that fee and then that's it. No need for one appraiser to bid $400 and another $350 (or have their rates compared if not a bid system ). Either the lender uses Fee surveys which is an established method per DF or the lender uses the appraiser's fees on record - but again does not price shop for non complex assuming the appraiser fee is covered by what the borrower pays for appraisal .

 

[DWiley]

While quality is a component of AMC selection, if 10 appraisers in an arear produce equivalent level of quality, then the selection is lower fee and/or turntime.

Those same 10 appraisers if assigned the work through a lender direct have to maintain a level of quality and turn time, but they are not expected to lower their fee to get an assignment ( for regular non complex work ). The direct lender typically pays a same fee for non complex appraisals from yearly C and R surveys/VA/other comparisons and appraisers agree to take that fee and then that's it. No need for one appraiser to bid $400 and another $350 (or have their rates compared if not a bid system ). Either the lender uses Fee surveys which is an established method per DF or the lender uses the appraiser's fees on record - but again does not price shop for non complex assuming the appraiser fee is covered by what the borrower pays for appraisal .

It is refreshing to see you finally admit that what you really do not like about the AMC model is that it further exposes appraisers to the market forces that typically affect pricing.

 

[glenn walker]

Oy veh it gets exhausting posting here!

When I write a post, I do not post my entire body of knowledge on a subject! For brevity sake I edit and post only the parts relevant to the point I am trying to make. I believe I did not say AVM's can only produce a range. I very well know an AVM can produce a point value ( which typically gets a confidence score )

I said, for the topic at hand, that a Fannie/Freddie in house internal AVM/other product for a WAIVER produces a value range, and then the human picks a point value - the point value being either a sale contract price or la oan officer estimate - as long as the point value is within the AVM range, it is good for the loan approval.

While quality is a component of AMC selection, if 10 appraisers in an arear produce equivalent level of quality, then the selection is lower fee and/or turntime.

Those same 10 appraisers if assigned the work through a lender direct have to maintain a level of quality and turn time, but they are not expected to lower their fee to get an assignment ( for regular non complex work ). The direct lender typically pays a same fee for non complex appraisals from yearly C and R surveys/VA/other comparisons and appraisers agree to take that fee and then that's it. No need for one appraiser to bid $400 and another $350 (or have their rates compared if not a bid system ). Either the lender uses Fee surveys which is an established method per DF or the lender uses the appraiser's fees on record - but again does not price shop for non complex assuming the appraiser fee is covered by what the borrower pays for appraisal .

So you want Fixed Fees-Seems like the Realtors did that for 75 years at the 6% and it was was C & R- The VA Fixes Appraisal fees at one fee and it's higher than C & R in CALI - So It seems most on here believe in Price Fixing as long as it's fixed them at High Fees . All this C & R and AMC bashing is all BS . Why not just come out and say you want high fixed fees. As always its always about the money .

 

[ramrcdk]

You have to remember I work rural areas. Lenders, borrowers, and agents are only too happy to show you Desktop Covid appraisals to try and influence value while they are wondering why I have to see the inside. Especially on a refinance. I don't know any Lenders to ask. Maybe you know some Lenders,

Tiffany, I agree. One of the very last Exterior's I've accepted: : Lender "Representative that handles ordering the Appraisal" was aghast, shocked, & rude that I ask for credible-use of interior conditions. She had "NEVVVER " in alllll her years heard of such!!! And obviously, I had NO idea HOW to complete an exterior report.
Politely I re-ask to perhaps Order a Full App'. So, huffing she sent an App' from 10-ish years prior which showed dated conditions of a 20-ish year old property. I ask if she wanted a Retro-Appraisal. WHAT??? So, I ask that she review the Cert', Limiting Cond', & the no use of an Extra'O Exception pages so we could "Get On the same page" and she could hopefully STOP being such a Little-Biouch'.
When I called the borrower to let her know I'd be "on site" she indicated "everything was new". So I ask if she could send interior- cell phone photos. Photos indicated the same conditions, carpet color, accent vinyl, wallpaper, etc. from the 10 year old app' = dated.
The Rep' was pissed. Lost that "rep" and the lender's business for "Best Efforts to provide" a "current value appraisal".
Not the first time, these Reps' want NO interference from the Paper we provide. So, the RISK was on me since everything else about the loan was easy-peasy.
Good Riddance!

 

[DWiley]

Tiffany, I agree. One of the very last Exterior's I've accepted: : Lender "Representative that handles ordering the Appraisal" was aghast, shocked, & rude that I ask for credible-use of interior conditions. She had "NEVVVER " in alllll her years heard of such!!! And obviously, I had NO idea HOW to complete an exterior report.
Politely I re-ask to perhaps Order a Full App'. So, huffing she sent an App' from 10-ish years prior which showed dated conditions of a 20-ish year old property. I ask if she wanted a Retro-Appraisal. WHAT??? So, I ask that she review the Cert', Limiting Cond', & the no use of an Extra'O Exception pages so we could "Get On the same page" and she could hopefully STOP being such a Little-Biouch'.
When I called the borrower to let her know I'd be "on site" she indicated "everything was new". So I ask if she could send interior- cell phone photos. Photos indicated the same conditions, carpet color, accent vinyl, wallpaper, etc. from the 10 year old app' = dated.
The Rep' was pissed. Lost that "rep" and the lender's business for "Best Efforts to provide" a "current value appraisal".
Not the first time, these Reps' want NO interference from the Paper we provide. So, the RISK was on me since everything else about the loan was easy-peasy.
Good Riddance!

That is a pretty good example showing the reason for some of the controls/requirements that are in place for the desktop appraisals.

 

[J Grant]

It is refreshing to see you finally admit that what you really do not like about the AMC model is that it further exposes appraisers to the market forces that typically affect pricing.

WRONG ( about what I admit or believe or have proven)

Since you no longer work for an AMC why do you keep defending their model of extractign payment from the HUD fee split ? I realize you went from private AMC side to a GSE agency side, and likely are more vested in what serves the lenders better, which is the lender able to get free of cost to them service via the HUD fee split compensating the appraiser.

However, you are also on a forum where you see daily how adversely this fee split system affects appraisers, seeing a number of them quit or go part time since unable to sustain themselves from low AMC fees, and a number of experienced/competent appraisers opting out of taking AMC work if they can find a better alternative.

Idk, seems a bold stance to end the AMC fee split off bundled fee compensation would be a win for everyone - it would ensure lender mortgage work through AMC's of experienced appraisers to retain good people in the profession and it would entice smart young people into entering the profession. It would seem that the lender paying a separate cost charge for the AMC service would do it, and if the lender can pass that cost charge along to the consumer as a line item, it still need not be an out of pocket expense for the lender.

Either end the HUD fee split to comensat t an AMC or cap it to 10 or15%, with lender paying anything above that an AMC wants to charge -

 

[J Grant]

It is refreshing to see you finally admit that what you really do not like about the AMC model is that it further exposes appraisers to the market forces that typically affect pricing.

Sorry but no - the reverse is true

What I dislike about the AMC model is the AMC leverage over orders as a power buyer, coupled with incentive to fee shop because of the Fee split compensation, exposés the appraiser to ATYPICAL forces that affect prices. Atypical both for other service businesses and atypical of the rest of appraisal work that is outside the AMC ordering system.