Fees Clear Capital

[J Grant]

The consumers of these appraisal reported are the lenders. Not the borrowers. And inasmuch as they're the ones who are actually doing the buying I think it arrogant to assume they somehow don't know or don't understand what they're buying.

So long as these lenders and the investors are satisfied with what they're getting it literally doesn't matter to them what the borrowers think they should do instead; except to the extent those borrowers make different choices about the lenders to whom they are applying for these loans.

By consumer, I mean borrower. And yes, I am aware that even though the borrower pays, they are not an intended user. I don;t need a lecture about it.

However, without a borrower, there is no loan. And borrowers are being DUPED with the AMC, because it is not disclosed to them that if their lender uses an AMC, their home appraisal will be auctioned ( in practice by fee comparisons ) to a lower bidder or lower fee, possibly passing over more competent or experienced appraisers. Ditto for the investors buying these loans.

If I ever have the energy for it I should try to make that available wrt media but don't; know if I have it in me - have a lot of personal projects on teh side and my own position is fine wrt apparising, at least so far - but who knows maybe I will try media outreach at some point.

The one thing lenders hate is bad publicity. Taht is why the AMC fee structure is kept secret - no appraiser information is attached to the report, do not discuss fees with the borrower on the engagement letter.

 

[WestMichiganCG]

Everyone seems to think the marketplace for services can't possibly worse for appraisers than the current environment. I think such an assumption might be limited by their imagination.

Flea markets operate on the small scale, like a farmer's market. Not like a wholesale distribution operation where the transactions are occurring on the industrial scale.

The relative inefficiency of the blast email could conceivably be replaced in the future with an E-Bay live action bidding setup. Appraiser-on-Appraiser competition. I've speculated about the possibility for many years. That was before we started considering how AI might be incorporated into these engagement/management functions.

I think the future may be bleaker for the AMC's. If appraisers bidding on AMC appraisals started looking at their skill set with highest and best use in mind. It would be obvious that there were other better alternatives.

 

[J Grant]

The thing with this business is that $275 is probably more than the new appraiser was getting fee split as a trainee. And there is probably unlimited number of orders at that price.

There is hardly any trainees anymore. And at least the trainee was getting something in return for a lower fee - training and a path to a license, and also often MLS use, and so on.

 

[George Hatch]

The flea market was meant to be a derogatory analogy.
It is about profit and greed, not the efficiency of a blast email.
I hate your idea of appraisers on appraiser completion live bidding, and I bet even the AMC 's hate it, though they use appraisers on appraiser completion now by comparing bids or fees. But they do not do it in a live auction style, which is not efficient wrt time , and perhaps too degrading even for them.

You are no friend to teh working appraiser if you keep putting forth that idea which you have for a number of years.

I LOL at your characterization that my speculation of the possibilities makes me a "no friend to appraisers". Whether I do or don't consider the possibilities of these trends eventually winding their way towards their logical conclusions isn't going to affect the progression or non-progression of those trends. Nobody at these lenders are following what a couple dozen appraisers on this forum talk about.

That "too much time for the live bidding" is a pretty dumb talking point, too. If some lender or AMC was going to do it they could prepare their listings the day before, dump them all online at 7:00AM local time and let the bidding proceed for an hour. It might already be technically possible.

WWTSD?
What would the suits do?

Just because I can use a little imagination in these discussions doesn't make me a villain. Nor does your accusation that I am a villain make it so. Your agreement or validation isn't important enough to me to prompt me to keep my speculation to myself. Obviously. If your opinion mattered to me enough to stop then I'd stop. That I don't submit to such coercive attempts should be considered self-evident.

 

[George Hatch]

I think the future may be bleaker for the AMC's. If appraisers bidding on AMC appraisals started looking at their skill set with highest and best use in mind. It would be obvious that there were other better alternatives.

I agree that the AMCs are more vulnerable than appraisers to the automation of their function. AMCs are already going out of business and appraisers are already quitting. They're just not quitting in large enough numbers to improve the level of competition for the survivors.

Must. Quit. Faster.
Moreover, if the market for services is going to collapse in the next few years the smarter move is to quit sooner before the number of ex-appraisers seeking alternatives explodes. Becoming the free agent at the bottom of an economic cycle is possibly the most risky situation there is.

 

[WestMichiganCG]

Appraisers are already quitting. They're just not quitting in large enough numbers to improve the level of competition for the survivors.

That's what I'm seeing as well. The demand curve has been controlled and not to the benefit of appraisers.

 

[Joe Flacco]

I don't think things are much different today with fees as they were between 2010-2019. The difference right now is number of loans. I think the fee situation is not something new happening now.

 

[Dublin ohio]

I hate your idea of appraisers on appraiser completion live bidding, and I bet even the AMC 's hate it, though they use appraisers on appraiser completion now by comparing bids or fees. But they do not do it in a live auction style, which is not efficient wrt time , and perhaps too degrading even for them.

A number of the large AMCs may not do live auctions. But they regularly hold blind auctions every time they send out a blast quote request

 

[Joe Flacco]

The commonly given out advice of "sign up with all of the AMC" was and remains the worst advice ever.

 

[WestMichiganCG]

I agree that the AMCs are more vulnerable than appraisers to the automation of their function. AMCs are already going out of business and appraisers are already quitting. They're just not quitting in large enough numbers to improve the level of competition for the survivors.

Must. Quit. Faster.
Moreover, if the market for services is going to collapse in the next few years the smarter move is to quit sooner before the number of ex-appraisers seeking alternatives explodes. Becoming the free agent at the bottom of an economic cycle is the most risky situation there is.

I've thought about this a lot. If you're the last one standing, you're in line for all of the bids. If you can survive on private work with a small amount of bank work, you'll be the last one standing when everyone else quits. You would be pushing a monopoly. You can write your own ticket. As I've gotten more experienced, private clients are willing to pay for my unique skill set. If the demand increases, so can my prices. If I was getting Clear Capital money I definitely would have pivoted into a new career. I think the experience of owning and running your own business is a skill set that could be harnessed into a higher pay grade.