How long until HVCC goes away best case scenario?

[The Warrior Monk]

George,
Problem is not just the appraisers fee but how about 24 hrs turn around time that has nothing to do with supply and demand?

It has everything to do with supply and demand. We currently have an oversupply of appraisers, and, as expected, turn times and fees are reduced. I started appraising when there was an undersupply of appraisers, turn times increased, and lenders were actually willing to pay more to get the assignments to turn around quicker.

 

[Greenback]

...To answer the part that I could get out of it, yes, I am a newbie to the forum when it comes to adding my thoughts.
What, do I have to have some time under my posts status to state my opinions? Or do the newbies just have to agree with all of the seasoned AF'ers!

It would be easier to agree with what works. It would help, a bit, if you've read this forum - your thoughts would be more artistic I believe; just a suggestion. You'll be more knowledgeable. Some have said they've felt like a Trainee again after finding this forum.

I guess my years as a Certified Residential Appraiser really gives me no excuse around here to speak my thoughts.

You will speak, it's a free country. I'll speak too.

Come to think of, I haven't ever really looked at everyones status' on this site, but I guess "appraiser trainee" must be pretty high based on your info.

It will help looking at a profile to kind of get some feel about who you are typing to. I'm three to four years of being complete. Whether I get my certification or not, I won't stop. That license is man made, in my eye.

Some Trainees are high on the totum pole; meaning they are better than many Certified Appraisers. I'm not saying I'm one of them, but, they do exist. For the record, I have seen some crappy work that wasn't ours. The point is, not all Trainees are stupid.

Newbies to this forum aren't all stupid, but they could brief themselves by reading the archives. Social technology is better than it was 10 years ago.

When you get a chance, read what Mr. Hatch has said in the last two or so days on this thread.

I have work...

Sincerely,

 

[moh malekpour]

It has everything to do with supply and demand. We currently have an oversupply of appraisers, and, as expected, turn times and fees are reduced. I started appraising when there was an undersupply of appraisers, turn times increased, and lenders were actually willing to pay more to get the assignments to turn around quicker.

The over supply of appraisers has been created by the AMC in the expense of quality of appraisals. Let's say that the AMC gets 50 appraisal orders every day that needs to be completed. How many appraisers the AMC needs to have at hand to complet 50 appraisals every day if the AMC gives 2 days turn around time to each appraiser? The answer is 100 because the appraiser who takes the assignment today and is supposed to turn it in 2 days cannot take an assignment next day because he is already working on an assignment. How about if the AMC gives 4 days turn around time to each appraiser? Then the AMC needs 200 appraisers to take 50 assignments every day. The shorter the turn around time, the less demand for appraisers and the less demand for appraisers, the lower fee for appraisals. As a matter of fact, the shorter turn around time came first that created lesser demand for appraisers and then lower fees for appraisals and this can go for sometimes. Both the shorter turn times and lower appraisal fees are detrimental to appraisal quality and have nothing to do with real supply and demand of the market. It is artificial and calculated.

 

[Doug DeMars]

Moh-
There's a bit more to what you're saying than what you just stated.

There is a certain threshold of capacity any given appraiser can produce. Quality of a report is one variable as to how much can be produced. Speed does limit the quantity one can produce...and if TAT weren't so demanding, you're right an experienced appraiser could juggle more assignments per month if they didn't have to "work on one at a time" as an AMC unknowingly (& doesn't care) encourages an appraiser for 24 hour BS.

The appraisal ordering system has been completely changed with the AMC in control of who receives work. And until the supply of appraisers willing to work for low fees and short TAT begins to drop significantly, they will have the upper hand. It won't last forever...and the AMCs will end up hitting a brick wall as soon as the supply of cheep labor is gone.

If things play out in the current ordering environment, AMC TAT will eventually expand beyond current levels. Tolerance for higher fees will only likely be absorbed when typical (future) TAT are considered unacceptable.

Still...the bottom line is supply and demand...artificial or not.

 

[Greenback]

There's an oversupply of AVM's and BPO's and Skippies.

Sincerely,

 

[Tim Hicks (Texas)]

Moh-
There's a bit more to what you're saying than what you just stated.

There is a certain threshold of capacity any given appraiser can produce. Quality of a report is one variable as to how much can be produced. Speed does limit the quantity one can produce...and if TAT weren't so demanding, you're right an experienced appraiser could juggle more assignments per month if they didn't have to "work on one at a time" as an AMC unknowingly (& doesn't care) encourages an appraiser for 24 hour BS.

The appraisal ordering system has been completely changed with the AMC in control of who receives work. And until the supply of appraisers willing to work for low fees and short TAT begins to drop significantly, they will have the upper hand. It won't last forever...and the AMCs will end up hitting a brick wall as soon as the supply of cheep labor is gone.

If things play out in the current ordering environment, AMC TAT will eventually expand beyond current levels. Tolerance for higher fees will only likely be absorbed when typical (future) TAT are considered unacceptable.

Still...the bottom line is supply and demand...artificial or not.

Guys, the AMC's have been paying low fees for years and have a stable of appraisers willing to accept their fees. Any experienced appraiser that has succombed to working for AMC's have been assimilated into AMC fees and turn times. It is not new. It will not end soon or it would have ended years before the HVCC took effect. It is business as usual for the AMC's. When I say "usual," I mean it is the way it has been for years for them and they have more than enough players to survive longer than us.

Keep convincing yourself it will end with unsupportable rationalization. An experienced appraiser should know better.

 

[moh malekpour]

Guys, the AMC's have been paying low fees for years and have a stable of appraisers willing to accept their fees. Any experienced appraiser that has succombed to working for AMC's have been assimilated into AMC fees and turn times. It is not new. It will not end soon or it would have ended years before the HVCC took effect. It is business as usual for the AMC's. When I say "usual," I mean it is the way it has been for years for them and they have more than enough players to survive longer than us.

Keep convincing yourself it will end with unsupportable rationalization. An experienced appraiser should know better.

Lower fee, yes but not that low. They used to pay $50 or $75 less than a typical market fee but now they take almost 2/3 of the fee. 24 hrs turn around time was never an standard turn time. it is insane to push appraisers to turn their appraiseals in 24 hrs or less. Why they do that? It does not make them more money so what is behind it that they insist to get the appraisal done in a haste? They do it because they want all those low fee appraisers be available for next assignments. If they give 2 or 3 days to the low fee appraiser to finish the job, that appraiser may not be availble for the next assignment and then they have to give it to another appraiser who wants higher fee. They don't want to forced to do that. The short turn around time is the key to keep the low fee appraisers availble for next assignments.

 

[Greenback]

... it is insane to push appraisers to turn their appraiseals in 24 hrs or less. Why they do that? It does not make them more money so what is behind it that they insist to get the appraisal done in a haste? They do it because they want all those low fee appraisers be available for next assignments. If they give 2 or 3 days to the low fee appraiser to finish the job, that appraiser may not be availble for the next assignment and then they have to give it to another appraiser who wants higher fee. They don't want to forced to do that. The short turn around time is the key to keep the low fee appraisers availble for next assignments.

And, keep their AVM updated. They have to keep their database ready because when skippy isn't quick enough or when the DeMinis comes into play, they can use their AVM. If they keep the AVM loaded they can turn big and fast bucks.

I think the faster they make money, the quicker it goes into their pocket. The only thing better for the greedy than making money is making fast money.

Skippies give them the incentive, too. The norm for skippy isn't the norm for an Appraiser who is real. Skippies are usually cheaper, as well. Thinking the wrong thing about the 'norm' hurts, too.

I'm sure there are more than three reasons.

Sincerely,

 

[George Hatch]

Moh,

We've had a couple AMC people in here over the years and what they usually tell us is that they don't actually set the fee splits on their own. According to them those fee splits are driven by the appraisers. The appraisers call them and offer to work for less in exchange for a larger percentage of the assignments.

Now I don't know that you could call that a complete lie anymore than you could call it the complete truth. I reckon the truth is in there somewhere in the middle. There undoubtably are some appraisers who have weighed their alternatives and have decided that it's better to work for $10/hour than to not work at all. Whether there are enough appraisers like that driving 100% of the pricing decisions is pretty doubtful, but I'll bet there are some markets (like the one you work in) where it happens exactly like that.

I also disagree with your assertion that the oversupply of appraisers was created by the AMCs. The last time I looked, no AMC can sign off on appraisals performed by trainees. Those trainees all work for appraisers, and whatever single signer misconduct that's been going on has been perpetrated by the supervisory appraisers, not their clients.

I realize it's getting old when I do this, but look at the commercial appraisers. The number of CGs has actually gone down since 1996, and except for the bump in 2007-2008 as people tried to beat the clock our numbers are still in a shallow decline. The difference isn't the AMCs, it's with the CGs themselves. For the most part we didn't participate in the trainee orgy. I think it's because "competition control" is a real popular topic of discussion among the commercial appraisers whenever they get together. There are other factors, too, but the bottom line is that you guys wouldn't be under as much stress right now if not for our profession's tolerance of the sweat shops during the bull run.

The trick for you guys is to keep that in mind and refrain from letting the sweatshops run amok the next time the market turns around.

 

[Tim Hicks (Texas)]

George realizes there are only two Silver Surfers. Him and the orginal. He applied the same logic to his business to choosing a forum avatar. Now, there are way too many ducks on this forum. Nobody realizes I am the original and the others are sweat shop avatars.