Declining Fees

[Mike Boyd]

I have not experienced declining fees. However, I do very few reports for AMCs. Some have requested lower fees but I will not do it for less. That said, the EFFECTIVE fees we are getting are declining, I if you compare the fee to the inflated value of the property. However, over the past 10 years the annual rate of inflation (not including real estate) has been 2 to 3% per year. 10 years ago I was charging $300 for a standard appraisal. Now I am charging $375. So, my fees have kept up with that rate. I guess we just have to eat all the added requirements as part of "the business."

 

[Terrel L. Shields]

I have noticed something about marketing appraisal services. One of our local appraisers used to work mostly for local banks until she got into demand with AMC's and MB's...to take care of their incessant demands for overnight service she dissed her local bankers. Now no one uses her locally and she had to spend her day arguing with MB's and AMC's over values.
When a local banker is using you, a private appraisal or estate appraisal comes through frequently that was referred to me by that banker. When you only work for AMC's and MB's you are invisble to the local market. And it is the local market that is the easiest to work for. In house lenders are a snap. No UW's. No reviews to amount to anything. And nothing like the overnight turnarounds and inflation demands.
You really need to work your local bankers. They provide more work than you might imagine. In my neck of the woods, banks lend far more money that do Mort. brokers.

 

[Workbox]

I and some other appraisers have won a small fight with an AMC, were we get our full fee for the appraisers. Thanks to the lender. The lender tried it the AMC's way, and hated it. The lowest bidder appraisal was not working out for them. If there is a difference in fees between the appraisers, it's about $25. Other may bump it due to area coverage. But yes, they will play musical chairs with us if we do not reply to an order, but we will be getting our full fees and they just add theirs on top.

Recently, spoke to one of their affiliated loan member, and they are 99% sure that they are going to jump ship, because the experiment with the AMC has hurt their business with the lowest bidder appraisers that did not know what they were doing for their particular product and market. They had a good rotation system and knew what ever the appraiser said, that's' what it was. Because, the appraisers were knowledgeable of the area and product, and built a trust.

I do not mind working with for an AMC, as long it is a decent fee and they let me do my work, without breathing down my neck.

 

[Couch Potato]

Mike, when comparing current fees to past fees you also need to factor in technological advancements that have reduced the time and effort required to produce an appraisal report.

 

[Charlotte Dixon]

Mike, when comparing current fees to past fees you also need to factor in technological advancements that have reduced the time and effort required to produce an appraisal report.

Well yes, Greg. But on the other hand, look at all the items we have to address now. In 1988 there was the simple URAR, canned Limiting Conditions that I just copied and inserted in the report, a few exhibits, and not much liability.

 

[Ray Miller]

The more wigets, technological advancements it seems to slow me down and cause more problems.

I don't have an appraisal soft ware program that dose not have bugs in it. I pay for a product then I pay so I can use that product and keep it working.

The more technological advancements it seems the more expense and you are required to keep up with the knowledge and the hardware. :new_multi:

 

[Birdman]

The more wigets, technological advancements it seems to slow me down and cause more problems.

I don't have an appraisal soft ware program that dose not have bugs in it. I pay for a product then I pay so I can use that product and keep it working.

The more technological advancements it seems the more expense and you are required to keep up with the knowledge and the hardware. :new_multi:

Ray,

Sounds like you have the "Total" pkg., lol.

SS

 

[Ray Miller]

Ray,

Sounds like you have the "Total" pkg., lol.

SS

You got it.

I also have Bradford but it also has some bugs in it as well. I now use Bradford most of the time.

I keep Alamode mainly for the x site and the order manager that some of my clients use. But it just as cheap to buy the whole package as parts of it.

 

[Jim Onderisin]

Of all of them, Bradford seems easiest with least maintenance.

 

[Marcia Langley]

But on the other hand, look at all the items we have to address now. In 1988 there was the simple URAR, canned Limiting Conditions that I just copied and inserted in the report, a few exhibits, and not much liability.

Charlotte,

A very valid point. From what I've read on this board the evolution of the process has been very similar to the corresponding evolution in the giant corporation that I grew up in.

Labor intensive tasks were improved with technology. The corporate planners had to justify the cost of adding the technology so their cost studies always included a force reduction on the benefit side. This force reduction was mostly assumed without regard to reality.

But even when the result was actually a time saver, it took only a matter of days for the additional demands to start rolling in.

One ludicrous waste of time was the desire for color printing. All the middle managers wanted their reports to be multicolored to impress their bosses. In the beginning, we had no color printers, only a color copy machine (one in a large five story building) that was programable to change the color on selected items. Talk about labor intensive!!! But the demand for more and more copies of the same report kept rolling in because "It won't add to the time due to the technology!"

Our cost studies went from four copies of a two inch binder to 12 copies of a four inch binder. It was a couple of decades before the paper was reduced somewhat and the reduction was not less demand for detail but less demand for quality.

Sound familiar?

Do any old timers here think their total overhead has been reduced since the eighties?