How long until HVCC goes away best case scenario?

[Doug DeMars]

Tim-
Sounds like supply and demand to me. To many that will say "yes"...for every "no" out there. Eventually the 10-20 that say yes will be 5-10...then 2-5...then...zero. Right now there are no viable alternatives for these yes-men.

From what I understand...RELS is "OK"...and much better than many garbage AMCs...but even RELS has to compete for appraisers who work for other AMCs. Who's going to stay with an AMC that only pays $175 if there are others that pay $275...or others that pay $375?

AMCs have simply capitalized on a fresh batch of newbie appraisers who are more than happy to play ball. That day will end...eventually.

I said no to RELS and Landsafe years ago. What you "head in the sand" appraisers fail to realize that for every one of you that says "no," they have 10-20 that say "yes."

So, wishful thinking will get you nowhere in this world...but surely you realize that closing your eyes and looking the other way does nothing by now?

 

[John Hassler]

Youse guys crack me up with the "Strike" BS and the "Union" BS. The powers that be are trying to get rid of appraisers as it is. Go on strike and let them prove that they don't really need us. From the few reviews I do, there is alot of money wasted on appraisals that are worthless unless recycled into toilet paper. Hard to take and accept I know, but the truth. Some folks need a prescription for "Clarity" the pill for those not in a state of denial or wishful thinking. Get over yourself delusion, they don't want us, and only barely need us. The market didn't get this F'd up without us, so as the old saying goes, when you point, there are at least 3 fingers pointing back atcha.

I'm looking at an LSI report right now which fits this description sent to me by the buyer. Slapped together with mix & match generic comments some of which contradict one another. Stable market checked and no time adjustments but the Market Condition section discusses prices declining 1-2% per month.

A vegetarian appraisal - some potatoes and no meat. Absolutely embarrassing that anyone would sign such a report but hey it passed LSI's strict QC requirements, is HVCC compliant, and made the Fidelity a nice profit so the world must be a better place. Hope the State likes it as well.

In the post May 1, 2009 world there is very high demand for very low competency appraisal reports. Should we start a pool as to when F/F will fail ... again?

 

[Greenback]

...I said no to RELS and Landsafe years ago. What you "head in the sand" appraisers fail to realize that for every one of you that says "no," they have 10-20 that say "yes."

So, wishful thinking will get you nowhere in this world...but surely you realize that closing your eyes and looking the other way does nothing by now?

That's a good post.

Sincerely,

 

[Greenback]

...In regards to a strike, I had suggested such a thing on HVCCPETITION back in July I believe. Think about it, if just 50% of the appraisers (and I think they would be in my book at least the good ones) who have not been in business for "10 minutes" went out even for a week or two, call it what you want. Or even better yet we all had to go for Continuing Ed . It would devasate the lending institutions, secondary market traders, ect. Unfortunately I don't know if I could do it as it would hurt the consumer in the long run. Not to mention I would think Cuomo might try to sue all the appraisers.

There is AVM and the De Minimis. Plus, many states allow BPO's. And, there is 100% (middles man) ownership by the banks.

I think it's more complicated than what you describe. If there is a strike, Independent Appraisers just can't say no - there must be action other than walking down the street with signs.

Sincerely,

 

[Doug Smith SRA]

No Forever

I am puzzled. Countless posters indicate their business flew out the window with the onset of HVCC. There is talk about being ruined and employees scattered to the wind. Over time didn't anyone ever think that building a business on one client type might not be in the best interest of the firm?

Are some appraisers fully building their client base of AMCs as if these will always be the norm? It may be hard to imagine but the current low fee slap dash AMC model will not last forever. If all the appraiser does is AMC work, then they are setting themselves up for the next fall. For example, what happens when they all start working off of the same do not use list? Mess up with one and the whole client base goes bye-bye. Limiting a client base to one type of client is not good business.

I would like to see more discussion about diversification and integration.

For instance, I experienced a lull in the last three years in relocation assignments. What I was able t find out was that some companies were using BPO's and skipping over appraisers. Now I am seeing an uptick and at least in two cases I was the tie breaker. I have picked up some new companies and the new ones indicate they are having trouble putting together a list of appraisers. Throughout this whole time, my name was in the ERC book. I held the door open for ERC business.

I get many calls for reviews and companies indicate a problem finding appraisers to do reviews. I wind up with the assignments at fees that parallel to the original assignment.

I moved into my market in 2003. I am busier today than I have been since I moved here. When I moved here I was handed two counties by VA. I had been on the application list in my old market waiting for someone to die. In my new market, no one wanted VA. Real Estate brokers were auctioneers and fees for appraisals were high because of volume. I jumped at the opportunity but was soon disappointed because of low volume. VA was not a factor in my market. Now, it is all changed. Fees went from $400.00 to $500.00 and VA appraisal orders have zoomed.

I think the future is in the hands of the consumer, the buyer and the borrower. The actual consumers of loans are wising up. They are going local and walking into the place where they have their checking and savings accounts and inquiring about borrowing. By that same token, the banks are wising up. Small banks don't have to follow HVCC and more banks, disgusted with their experience with an AMC are looking for alternatives. One small bank in Montana has a smart trick. When it comes to ordering the appraisal, they turn the job over to another branch office. It works for them.

The bottom line is to realize there is no forever and to diversify. A caveat is to stop being stupid and consider signing up for every AMC in sight and be at least the appraiser of last resort. Be there ready to do the assignment when no one else can. After all, AMC haters think they are too smart to soil their hands with AMC work. Well some jobs need smart appraisers and there will be day when pay will be commensurate with the scope of work.

Doug

 

[USPAP101]

In Spain, in 1989, laws were designed that outlawed appraiser/lender relationships, and forced all lending to go through an AMC. 5 years later, new laws were passed that made it illegal for a bank to have any ownership interest in an AMC.

20 YEARS LATER... AMCs have narrowed down from many to a few, and the few remaining are stronger than ever.

To be an appraiser in Spain, one must HAVE A COLLEGE DEGREE as either an engineer or an architect. With the bar raised for entry, so have the fees.

The AMC there is very similar to what firms over here have done for years. They hire, train and manage the appraiser and the business side of things. The appraiser appraises the real estate.

It is much easier for the Spanish government to regulate and fine the AMC (if they break the rules), than it is to fine and regulate one appraiser at a time like it is here. Our State boards lack the funding and the people to properly regulate the appraising wild west.

With regulation, the AMC has something to loose....money.

For those that think that the AMC model is going to vanish, go ahead and find that new career. It simply will not happen.

What is more likely to happen, is AMCs will become regulated, there will be a few left standing, many appraisers who choose not to adapt will retire or find new careers and the final pool of appraisers will become smaller.

When economic recovery for our country (now that is a concept...appraisers suffer when the ENTIRE economy suffers) so will the pay grade to appraisers.

Simple supply and demand issues hurting the appraiser today.

1) Politicians don't want to raise "costs" to the consumer (home owner obviously can't fork out another $100 for an appraisal, but they can afford a $150K + home),
2) Banks are therefore pressured to not raise costs (at least when they can't make a dime off of it)
3) National Banks have leverage over the over supply of AMCs, who just like appraisers, must compete with other AMCs for business for the banks who often pit AMCs against one another with the same price game appraisers are complaining about
4) AMCs are asked to perform many of the underwriting tasks that used to be performed by the banks, who have off loaded these tasks to the AMC (driving up the cost to manage an appraisal)
5) We have an over supply of appraisers for the workload available right now
6) We have a weak economy

It is all of these elements combined together that is causing the fee issues. It is NOT HVCC, it is NOT AMCs, it is NOT incompetent appraisers. It is SEVERAL ISSUES ALL TRANSPIRING AT THE SAME TIME that appraisers need to sit back and reflect on.

Make a choice: Stay in or get out. Screaming, kicking, cussing, blaming will get you no where but a trip to the hospital with a heart attack.

Be the business professional you claim to be and LOOK AT YOUR ENTIRE SITUATION!! Successful businesses do exactly that and figure out only not a way to survive, but to THRIVE when the chaos returns to some sort of normality or equilibrium.

Let the flaming begin.....:new_smile-l:

 

[rwincz]

How do we become professionals again and take control of our businesses again?

Why are management companies now making millions and millions of dollars in this bad economy. Look what quiet got us. Previous posters are right on one thing , there are about 40 to 50 appraisers a day that are not renewing their licenses. Hopefully in 2 years there will be 35,600 less appraisers. I doubt if anyone would be crazy enough to want to become an appraiser (which I think is almost impossible now any ways). Maybe things will get back a point were we as business owners can grow our business again. The banks aren't saving clients money. Appraisals still cost the same or even more. I think we need to cut Attorney General Andrew M Cuomo's salary in half and give him twice the work. See what kind of a reaction we get from him. I also agree, businesses should not put there eggs in one basket. That is why I had hundreds of clients. Of course we specialized in residential appraisals and at the time had no reason nor had the time to do commercial , relocation,or attorney related work. We are also one of the last ones to give into AMC's and now can't even get on lists because AMC' have to many appraisers already. Now the AMC's have my 100 clients. I never thought I would see this day come. Everyone is sitting back and letting the management companies make all the money and control our work load. Should we just let this happen. How do we become professionals again Better yet, lets all become management companies. Maybe thats the answer??

 

[Doug DeMars]

Nice post USPAP101...

AMCs are not the enemy...they just behave that way. I only hope for one simple regulation for the AMCs. The indemnification clause needs to be unavailable for the AMC. They need to earn their right to take responsibility for the appraisal process. Without that, they have no incentive to select the most qualified.