Declining Fees

[Paul Sluka]

It is becoming more and more evident that lenders and the third party appraisal companies that distribute appraisals are racing to the bottom of the barrel requesting appraisers lower their fees. I understand that there are 2 third party companies that are requesting that their fees be lowered to $250 for a full appraisal. I have 2 questions:

1.) Can anyone possibly accept such a low fee?

2.) If this fee reduction continues, do you feel the appraisal industry would be ripening for unionization?

 

[jonathan asbury]

personally:

no, and no

Industry wide:

yes and no

jonathan

 

[stefan olafson]

No and no, it's the choice of the appraiser to accept lower fees. My fees are going up and my clients are happy with the product. A part of that may be I'm one of the only reliable appraisers who work a very rural area in Minnesota, but hey, it's my market!

Oly

 

[Mountain Man]

Ditto... no and no. There already IS a union, and has been for years. Why does everyone scream for a Union to save them when they make poor business choices???

 

[TC]

Why does everyone scream for a Union to save them when they make poor business choices???

Cuz they're lazy.

TC

 

[hastalavista]

personally:

no, and no

Industry wide:

yes and no

jonathan

...Ditto....

 

[Jerry Still]

Double Post=Double Answer (Supply & Demand)

Barry Dayton said in another post:

More and more mortgage appraising is becoming a horrible place to be. It was not like this when I started even as recent as 1991. The public was not all flocking to out of State mortgage brokers they don't trust. We were not all constantly servicing a different and new out of State mortgage company we can't trust. AMC's were not driving down fees the way they are with flocks of relatively recently licensed appraisers who just moved out of Skippy's shop yesterday accepting those fees. The few havens of sanity that we had left have been stolen from us by the AMC's because we have allowed our field to get inundated by Skippy trained appraisers who can make a profit by ignoring the certifications they are signing.

The solution is exactly what most all the other trades did a long time ago. It got tough to become an electrician or plumber without a long and costly apprenticeship. One practically needed a family member to get in. We have to get Skippy out of the training business and make trainees far and few between for years ahead. You could have more effect on future business for the trade by taking on reviews and promptly filing State complaints on those that they should be shown the door out of the profession than by trying to use our charm to talk brokers into risking their own money for someone else's loan on a regular basis.

I more than agree. As long as starving trainees and the newly licensed are willing to bend over in the clover and accept low fees.

JS

 

[Ralph Baldwin]

My answers is no and no. My fees have not decreased and I won't accept assignments for less than my normal rates. Conforming loan volume has fallen but REO, HELOC, RELO's and reviews have increased. You can't survive on only one product line.

 

[Colleague]

(1) Yes, believe it or not there are appraisers out there doing appraisals for as little as $150.

(2) I believe this trend will continue. I saw an article today in Valuation Review about AMCs. www.ValuationReview.com The appraiser they interviewed thinks franchise appraisal companies will evolve as a result of the amount of volume required in order to make any money appraising. So right now it appears to be about quantity, not quality.

Having said that, I will not accept an appraisal assignment from an AMC unless they pay my full appraisal fee.

 

[Terrel L. Shields]

1.) Can anyone possibly accept such a low fee?

Yes, some people act out of desperation or think it will help them. It won't and it hurts everyone.

2.) If this fee reduction continues, do you feel the appraisal industry would be ripening for unionization?

The Unions are helpless and any collusion on fees are viewed as a commerce issue that will blow up in the appraisers face.

The only solution is to identify people who do cheap work, and then turn them in if the quality matches the fee. if it doesn't match the fee, i.e.- they have done a credible job, then it is self-correcting. They will go broke rather quickly.